Nigeria’s senate has approved a request by President Muhammadu Buhari to restructure 23.7 trillion naira ($52 billion) in short-term loans due to the central bank to long term-debt, minutes from a Wednesday meeting showed.
Approval from the lower house of representatives was expected at a sitting later on Thursday, which would allow Buhari to sign the bill into law before he leaves office this month after serving the maximum two terms.
At the time of Buhari’s request to parliament in December, some lawmakers questioned the plan and asked for more information on how the money was used.
But following a report by a senate panel on Wednesday, which showed the money was used to support state governments and fund operations of the federal government, senators agreed to convert the short-term loans to 40-year debt at 9% interest.
In January, the Debt Management Office said Nigeria’s total debt could rise to $172 billion after the loan-to-bond swap and new borrowings to fund the 2023 budget.
Official data shows that Nigeria spent more than 90% of its revenues on debt repayments last year, leaving little for education and health, but Buhari has said his government had no choice but to borrow its way out of two recessions in the last seven years.
Africa’s largest economy has struggled with low revenues due to crude oil theft in the Niger Delta.
