Debts: Reps demand N2.7tn settlement proposal details

House of Representatives

Barely 24 hours after the Federal Government announced a proposal of N2.7tn to offset accumulated local debts and other services, the House of Representatives on Thursday demanded the details of the plan.

Lawmakers passed a resolution asking the Minister of Finance, Kemi Adeosun, to appear before them in plenary with the details of the proposal.

The decision was taken after a member from Anambra State,  Obinna Chidoka, reported that the state was excluded from the list of states to benefit from the payment, particularly the releases to be made to address ecological problems.

Chidoka expressed surprise that Anambra, known for its erosion problems, was not on the list of beneficiaries.

His protest led to a resolution by the House, demanding the details of the plan at a session presided over by the Speaker, Yakubu Dogara.

“Let the Minister of Finance come before the House with the details of the proposal,” the House resolved.

Adeosun had disclosed after Wednesday’s Federal Executive Council meeting in Abuja that FEC approved the proposal.

The FEC meeting was presided over by the Acting President, Prof. Yemi Osinbajo.

The minister said debts piled up since 1994 would be settled through the issuance of promissory notes and bonds.

Adeosun listed other government obligations to be settled to include debts owed contractors, employees, power firms, pensioners and state governments.

For instance, she said N740bn would be spent on outstanding pensions and promotion salary arrears, while N1.93tn would go to other obligations.

The minister explained, “The supplier and contractor obligations will be resolved through a strict process of final validation, following which those confirmed will be settled through the issuance of liquid promissory notes (10-year tenure) phased over a three-year period to minimise the impact on liquidity and with preference given to those willing to offer the largest discounts.

“Obligations owed to individuals (for example pensions and employee benefits) will be resolved through the issuance of specific bond instruments, again phased over the next three years. These obligations will then be incorporated into the Medium-Term Expenditure Framework by the Ministry of Budget and National Planning.”