By Daniel Edu
In the upcoming administration of President Bola Tinubu, it appears that an approximate sum of N187.32 billion will be allocated to resolving outstanding debts owed to local contractors within this fiscal year, as per investigations conducted by The PUNCH.
These debts have been outlined as promissory notes in a document titled ‘Schedule of promissory notes issued by category as at September 30, 2022,’ issued by the Debt Management Office.
A promissory note, as explained by Investopedia.com, is a financial instrument that entails a written commitment from one party (the note’s issuer or maker) to pay a specific sum of money to another party (the note’s payee), either upon request or at a predetermined future date.
Section 4 of the Government Promissory Notes Act stipulates that these government promissory notes are funded from the collective revenue and assets of the federation.
The section reads, “The principal sums and interest represented or secured by any government promissory notes are hereby charged upon and shall be payable out of the general revenue and assets of the federation.”
Two such promissory notes have been released to resolve the debts owed to local contractors. The initial note was published on November 23, 2020, while the second was released on July 12, 2021.
The repayment of these debts will occur in three currencies: the Nigerian naira, the US dollar, and the euro, in accordance with a Central Bank of Nigeria (CBN) document.
The liabilities are divided as follows: Naira liability stands at N57.83 billion, dollar liability is $26.48 million (equivalent to N19.78 billion), and euro liability is €133.76 million (equivalent to N109.71 billion).
Both promissory notes are slated for clearance by November 23, 2023.
The Federal Government holds a debt of approximately N11.16 trillion towards contractors engaged in the construction of various highways across the nation, along with certificates of project completion.
