The Federal Executive Council on Wednesday approved the issuance of promissory notes for the settlement of over N740 billion worth of debt owed contractors.
The Minister of Finance, Kemi Adeosun, disclosed this when she addressed newsmen after the Federal Executive Council meeting, adding that debts to GENCOS, DISCOs and state governments stood at N193.69 billion.
According to the minister, the Memorandum that the Council approved was for the issuance of a promissory note programme to settle inherited debts to local contractors and state governments on the part of Federal Government.
She said the obligations was accrued prior to the coming into office of the All Progressives Congress led Federal Government.
”We had pension liabilities, salaries some of which go back to 2006; unpaid salaries from 2012 to 2015; pensions to former Nigeria Airways staff from 2009, the Export Expansion Grant which was suspended in 2014; there are actually obligations on that between 2007 and 2014 when they were suspended.
The minister disclosed that what the government agreed to do as regard issuance of promissory note, is to make the note effectively an IOU (I Owe You note which is not negotiable).
”We are going to issue IOUs to the contractors and to those who Federal Government is obligated.
”Those promissory notes would mature over the next 10 years.
”So basically what we are doing is solving a long standing problem of contractor arrears,” she said.
Adeosun added that the government had also directed that agencies feed back their indebtedness every quarter to avoid a repeat.