The Debt Management Office disclosed that it had securitized N22.7tn in Ways and Means Advances on the Nigerian Stock Exchange.

In its Frequently Asked Questions statement, the DMO disclosed that it would pay back a 40-year loan from the National Assembly at an interest rate of nine per cent.

It was also disclosed that there would be a three-year moratorium on payments of principal owed by the Federal Government to investors. The DMO noted, however , that “the Securities will continue to be issued to and serviced by Central Bank as at when it is due for payment

“The Securities will not be issued to the public by the FGN to raise funds.”

The debt office listed some benefits of securitization, saying that it would lead to transparency in the nation's debt load and reduce interest payments.

It said, “It will reduce the Debt Service Cost as the new Interest Rate is 9% p.a. compared to the Monetary Policy Rate plus three per cent which translates to 21.0 per cent p.a. (MPR – 18.0 per cent + 3 per cent) currently being charged on the Ways and Means Advances.

“The large savings arising from the much lower Interest Rate will help reduce the deficit in the Budget and expectedly, the level of New Borrowings.”

It also mentions that the Federal Government will begin repaying interest on its loan this year while it will not start to repay principal until four years from now.

The debt office said, “Provisions for Interest on the securitized Ways and Means Advances (starting from 2023) and principal repayments starting from year four, will be made in the Annual FGN Budgets.”

The DMO also noted that the securitization of the Ways and Means Advances did not involve new money being given to the Federal Government, as CBN had already provided these funds.

It stressed that the approval of both chambers is required for any securitization, and noted that the House of Representatives will be asked to approve such actions after they are taken.

The Senate and House of Representatives have both approved the president's request to restructure the N22.7tn Ways and Means Advances.