“The findings from The PUNCH suggest that the administration under President Bola Tinubu is expected to allocate approximately N187.32 billion to settle outstanding debts owed to local contractors within this year. These debts have been documented as promissory notes in a report titled ‘Schedule of promissory notes issued by category as of September 30, 2022’ by the Debt Management Office.
A promissory note, as defined by Investopedia.com, is a debt instrument containing a written commitment from one party (the issuer or maker of the note) to pay a specific amount of money to another party (the payee of the note) either upon demand or at a specified future date.
According to Section 4 of the Government Promissory Notes Act, these government promissory notes are financed from the general revenue and assets of the federation. The section stipulates that both the principal sums and the interest, represented or secured by any government promissory notes, are to be charged upon and will be payable from the general revenue and assets of the federation.”
The PUNCH has observed that two promissory notes were issued to resolve obligations with local contractors. The initial note was released on November 23, 2020, and the second note on July 12, 2021. As per the information from the Central Bank of Nigeria, the payment for the debt will be made in naira, dollars, and euros.
The naira liability amounts to N57.83 billion, the dollar liability is $26.48 million (equivalent to N19.78 billion), and the euro liability is €133.76 million (equivalent to N109.71 billion). Both of these promissory notes were slated for settlement by November 23, 2023.
It was previously reported by The PUNCH that the Federal Government was indebted to contractors for the construction of various highways throughout the country, as well as certificates of completion, amounting to approximately N11.16 trillion.
