Relief For Banks, As FG To Settle 2006-2015 Contractor Debts, Says Adeosun

Relief For Banks, As FG To Settle 2006-2015 Contractor Debts, Says Adeosun

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Post Views: 448 • Ex-Nigerian Airways’ Workers Too • Promotion Arrears Gulps N34.2bn Good news came the way of Nigerian banks on Tuesday as Minister o...

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• Ex-Nigerian Airways’ Workers Too
• Promotion Arrears Gulps N34.2bn

Good news came the way of Nigerian banks on Tuesday as Minister of Finance, Mrs. Kemi Adeosun, announced plans by the Federal Government to settle debts and contractual obligations to local contractors it inherited from previous administrations.
The contractual obligations which accrued in the 10 years between 2006 and 2015 have resulted in stacks of unserviced loans, leading to huge non-performing loans for which the banks provisioned from their profits. This expectedly left gaping holes in the books of many of the banks, some of which were thrown into losses.
Specifically, she listed the debts to include obligations to pensioners and salary and promotion arrears to civil servants; obligations to contractors and suppliers who in turn, owe banks increasing the quantum of non-performing loans, and unpaid electricity bills by the Ministries, Departments and Agencies (MDAs).
Others, according to a statement by Oluyinka Akintunde, special adviser, Media & Communications to the Minister, include exporters owed funds under the Export Expansion Grant Scheme and unpaid refunds due to State Governments in respect of projects undertaken on behalf of the Federal Government.
Speaking when she appeared before the Senate Ad-Hoc Committee on “Promissory Note Programme and Bond Issuance” chaired by the Deputy Chief Whip, Senator Francis Alimikhena, Adeosun explained that the debts as well as the terminal benefits of ex-Nigerian Airways workers, would repaid through promissory notes and bonds issuance. Payment will however by subject to the approval of the National Assembly.
The Minister also explained that the terminal benefits of the ex-Nigerian Airways workers, have been agreed at N45bn, following verification, debunking claims that there was a presidential approval for the payment of terminal benefits to the workers.
“There has been a misconception in the media that the President had approved the payment of N45 billion terminal benefits to the workers. There is no presidential approval and no appropriation yet for the payment of N45 billion to the ex-workers,” she said.
Without stating how much the contractual obligations amount to, she admitted that they constituted a drag on economic activities across many sectors, which is why she continued, the Muhammadu Buhari Administration is determined to address them.
“The Federal Government is working towards settling these inherited debts. The Small and Medium scaled Enterprises are the lifeline of our nation. The Federal Government will be stimulating the economy by paying these legacy debts,” Adeosun told the Committee.
Speaking earlier, representative of the Accountant General of the Federation, Mohammed Usman, told the committee members that the government paid N34.2bn to clear the promotion arrears to workers in the MDAs.
Usman, who is the Director of Funds in the Office of the Accountant General of the Federation, added that the payment process was still ongoing.
“These payments were made to the accounts of the beneficiaries in the MDAs after detailed verification of all documents attached as proof of promotion,” he said.

Photo Caption: Deputy Director, Federal Ministry of Finance, Alhaji Mohammed Isa; Nigeria’s Finance Minister, Mrs Kemi Adeosun and Director of Funds, Office of the Accountant General of the Federation, Mohammed Kudu Usman, at a meeting of the Senate Ad-Hoc Committee on the Federal Government’s Promissory Note Programme and Bond issuance at the National Assembly on Tuesday, May 15, 2018

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