Nigeria's
government has asked parliament to amend its spending law to enable a debt
program to settle 2.7 trillion naira ($8.6 bln) worth of obligations including
pensions and salary arrears, according to a letter from Vice President Yemi
Osinbajo.
The
letter, read out in the Senate on Tuesday, requested amendments to the law,
which stipulates allocation of government spending, to allow Nigeria to fund
recurrent expenditure from proceeds of the debt rather than just capital
projects.
Nigeria's
Fiscal Responsbility Act states that proceeds of government borrowings can only
be applied towards capital expenditure. Osinbajo said the amendment was to
provide the legal backing for the use of the debt to meet the obligations.
The
vice president sent the letter to the Senate last month while President
Muhammadu Buhari was on medical leave in Britain. The letter was read out after
the Senate reconvened following a seven-week recess.
Africa's
biggest economy grew out of recession in the second quarter as oil revenues
rose, but the pace of growth was slow, suggesting the recovery is fragile.
Osinbajo's
letter said the obligations had become inimical to government plans to revive
the economy through the provision of modern infrastructure and settle pension
and salary arrears dating back five years.
Finance
Minister Kemi Adeosun has said the government plans to refinance $3 billion
worth of treasury bills denominated in naira with dollar borrowing to lower
costs and improve its debt position.
Source: reuters.com
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