The Nigerian Senate has approved the conversion of N23.72tn ($57.7bn) of unappropriated expenditure funded by the Central Bank of Nigeria (CBN) into a 40-year bond.

President Muhammadu Buhari had previously written to the National Assembly to approve the amount alongside an additional N1tn to be taken from the CBN window. The loan will be converted into a 40-year tenure bond priced at 9%.

The bond conversion will move the amount from the CBN’s balance sheet to the Debt Management Office for management. The Federal Government agreed to an interest rate payment of the going monetary policy rate plus 300 basis points as the price of the loan.

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The CBN’s overdraft to the government has increased 2,902% since 2015 to its current value of N23.72tn. A monetary policy expert and professor of applied economics, Godwin Owoh, said the Senate’s approval amounts to illegality that would be challenged by the court by interested Nigerians.

The Senate further approved the sum of N180.46bn being the balance of the supplementary budget and the interest accrued on the W&M advances.