Clearing the Ledger: Tinubu’s Government Set to Settle N187.32bn Contractors’ Debt by November 2023
President Bola Tinubu’s administration is anticipated to allocate approximately N187.32 billion towards the resolution of debts owed to domestic contractors this year, as revealed by a recent investigation conducted by The PUNCH.These outstanding debts have been documented as promissory notes within a comprehensive record titled “Schedule of Promissory Notes Issued by Category as at September 30, 2022,” assembled by the Debt Management Office.A promissory note, as elucidated by Investopedia.com, functions as a financial instrument that embodies a written commitment from one party, denoted as the issuer or maker of the note, to remit a definite monetary sum to another party, designated as the payee of the note. This payment may be executed either upon request or on a predetermined future date.Under Section 4 of the Government Promissory Notes Act, the settlement of government promissory notes is derived from the collective revenue and assets of the federation. This statute is explicit: “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.”Scrutiny from The PUNCH reveals that a pair of promissory notes were dispatched for the purpose of addressing outstanding obligations to local contractors. The initial issuance transpired on November 23, 2020, with a subsequent issuance following on July 12, 2021.Noteworthy is the complexity of these debt payments, with obligations spanning the realms of the naira, dollar, and euro, as indicated within the documentation provided by the Central Bank of Nigeria (CBN). These financial commitments encompass a naira liability totaling N57.83 billion, a dollar liability amounting to $26.48 million (equivalent to N19.78 billion), and a euro liability measuring €133.76 million (equivalent to N109.71 billion).Both of these promissory notes are earmarked for resolution by November 23, 2023, marking a definitive deadline for their finalization.The preceding reporting by The PUNCH has previously highlighted the substantial debt of approximately N11.16 trillion owed by the Federal Government to contractors engaged in the construction of diverse highways across the nation, inclusive of certificates of project completion.