Some lawmakers had questioned the plan to convert $53 billion in central bank overdrafts into 40-year bonds.

Nigerian President Muhammadu Buhari says Africa’s biggest economy will have to pay 1.8 trillion naira ($4 billion) in extra interest this year if parliament rejects a loan-for-bond swap request over overdrafts from the central bank to the government.

Buhari made the comments in his budget speech to parliament after signing the 2023 budget into law on Tuesday.

In December, the Senate delayed a decision on the president’s request to convert $53 billion of central bank overdrafts to the government into 40-year bonds after some lawmakers questioned the plan.

In his speech on Tuesday, Buhari said the government currently pays a 3 percent spread on top of the central bank’s 16.5 percent lending rate, but his administration has negotiated a 9 percent rate for bonds. .

Lawmakers increased the size of the 2023 budget by 6.4 percent to 21.83 trillion naira ($49 billion) after they raised the supposed benchmark oil price from $70 to $75 a barrel.

“Taking into account the impending transition process… I decided to enact the Appropriations Bill of 2023… to allow its implementation to begin without delay,” the president said, referring to the upcoming general election in February.

Having completed the maximum two terms allowed by the constitution, Buhari is not running for re-election.

Rising debt, weak economic growth, high inflation and growing insecurity are major issues for many Nigerian voters.

The International Monetary Fund has urged Nigeria to phase out central bank financing of the government to help reduce double-digit inflation.

Economists say the Nigerian government is spending more money on debt service than on education and health, but Buhari has said his government had no choice but to borrow to get out of two recessions in the last seven years.