FG plans to convert CBN’s loan into tradeable securities

The federal government has declared that the N2.8 trillion borrowed from the Central Bank of Nigeria (CBN) could be converted into tradeable securities.

The Minister of Finance, Zainab Ahmed, made this known at the recent public presentation of the 2021 approved budget – breakdown and highlights by the minister.

Ahmed said in the presentation that the government applied for the loan due to its failure to meet the revenue targets in 2020.

According to her, “On CBN financing, we will not normally make a line provisioning for the financing. So we have domestic borrowing in the budget and that covers whatever remit of financing required to fund the national budget.”

“We are working with the CBN to regularise the previous borrowing that have been made to turn them into formal borrowing and by the Nigerian economy and to this extent, the CBN and I (fiscal authorities) need to agree on the rates and the tenures and the cost of the borrowing.

“So, we would be formally doing that in early 2021 on the previous borrowing that has been made, and also projected borrowings in 2021.

“So we will design special instruments that limit what is done in terms of domestic borrowing from the CBN.”