Nigeria’s federal government Wednesday approved the sum of N2.7 trillion for the payment of 20-year old outstanding debts owed pensioners, contractors, and other employees.
The beneficiaries, according to the government would be settled through the issuance of liquid promissory notes (ten-year tenure) phased over a three-year period to minimise the impact on liquidity, while preference would be given to those willing to offer the largest discounts.
This was the fallout of the Federal Executive Committee (FEC) meeting, which held in Abuja.
Disclosing the approval of the N2.7 trillion, Kemi Adeosun, minister of finance, said that in March this year, the Economic Management Team, under the leadership of Yemi Osinbajo, acting president mandated the Minister of Finance to chair a committee that would establish a process to confirm the validity of inherited Federal Government obligations, and propose a mechanism to resolve them.
“These obligations largely consist of dues owed to State governments, oil marketers, power generation and distribution companies, suppliers and contractors by FG parastatals and agencies, payments due under the Export Expansion Grant (EEG), outstanding judgment balances as well as pension and other benefits to Federal Government employees,” she said.
The Federal Government said that after the reconciliation by the committee set up to look into the indebtedness, it was able to provisionally confirm a discounted total of N2.7 trillion of obligations consisting of N740 billion of outstanding pensions and promotional salary arrears (not discounted) and N1.93 trillion (discounted) of other obligations including dues to Federal Government contractors and suppliers.
“Following an exhaustive process of reconciliation, the committee has been able to provisionally confirm a discounted total of N2.7 trillion of obligations, consisting of N740 billion of outstanding pensions and promotional salary arrears (not discounted) and N1.93 trillion (discounted) of other obligations including dues to Federal Government contractors and suppliers. “These numbers are aligned with existing Federal Government estimates, and in some cases, are lower than previously estimated,” she said.
Businessamlive gathered that some of the obligations dated back as far as 1994 and that its resolution will significantly enhance liquidity in critical sectors of the economy.
Meanwhile, the acting president has also directed the minister of finance to release the sum of N1.6 billion for 16 states ravaged by floods across the country. The move, according to Femi Adesina, special adviser to the President on Media and Publicity, was to help cushion the effects of the disaster on Nigerians.
Adesina while briefing the State House Correspondents shortly after the FEC presided over by Acting President said the money would be taken from the Federal Government’s Ecological Account in the Central Bank of Nigeria (CBN).
He said the Minister of Finance has been directed to release the money to the National Emergency Management Agency (NEMA) for onward distribution to the affected states. The states included Ekiti, Kwara, Lagos, Bayelsa, Enugu, among others.
Federal Executive Council also approved the award of a N159 million contract for the engineering design of a sewer line N159 million to capture Katampe, Gwarimpa, Kado, and other districts of the Federal Capital Territory, Abuja.
Another contract of N2.5 billion was approved for the completion of Kabusa road, also within the FCT. The contract is expected to be completed in 12 months.