(Bloomberg) -- Nigerian lawmakers increased the legal limit on government borrowings from the central bank in an emergency sitting of the senate on Saturday.
An amendment setting up an increase of the limit was among bills considered and approved by the lawmakers, according to an order paper for the day seen by Bloomberg.
The change allows the government to borrow up to 15% of the past year’s budgeted revenue from the central bank, up from 5% previously, Thomson Sekibo, a senator and member of the main opposition Peoples Democratic Party, who attended the session, said by phone. “However, this must be paid back before another budget cycle,” Sekibo said.
The senate is making the change after it approved earlier this month a request from outgoing President Muhammadu Buhari to convert 22.7 trillion naira ($49 billion) of loans from the central bank into 40-year bonds, increasing the country’s outstanding public debt by 50% to 69 trillion naira.
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Buhari, whose second four-year term ends on May 29, accumulated the loans by largely ignoring the legal limit set in the central bank law. The expansion in the limit will give Buhari’s successor, Bola Tinubu, some fiscal room to lean on the central bank to spend after debt repayments consumed 96% of the West African nation’s revenue last year.
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