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 Responsibility 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.
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