FG approves N2.7tn debts for contractors, pensioners

One of the most cheerful news for the economy from Wednesday’s Federal Executive Council (FEC) meeting could be the rare approval handed down to proposal presented by the Ministry of Finance to offset accumulated Federal Government’s N2.7 trillion debts.

Before now, both contractors and pensioners had been gnashing their teeth due to massive debts incurred by the federal government over the years. The Minister of Finance, Kemi Adeosun, said the obligations that accumulated over the last two decades would be paid through bond and promissory note issuance.

Explaining the development, Adeosun said part of the inherited and long outstanding federal government’s obligations included those being owed state governments, employees and contractors. According to her, there was still another hurdle to pass before the release of the money which may come in tranches.

She revealed that the council would first seek approval from the National Assembly ahead of implementation. Checks have revealed that some of the debts were owed strategic sectors of the economy including state governments, oil marketers, power generation and distribution companies, suppliers, and contractors by government’s parastatals and agencies.

Although, payments for these debts were due under the export expansion grant, outstanding judgment balances as well as pension and other benefits to federal government employees. The finance ministers further disclosed to journalists at the close of the FEC meetings that many of those debts were dated as far back as 1994.