FEC approves N2.7 trillion to offset contract liabilities

• Osinbajo orders release of N1.6b to flooded states
The Federal Executive Council (FEC) yesterday approved the validation of promissory notes and a debt issuance ‎programme for payment to Federal Government contractors, its employees and state governments valued at N2.7 trillion.

A promissory note is a written formal commitment to make a payment at a certain date and time and can be traded on financial markets.

Minister of Finance, Kemi Adeosun told State House Correspondents after the Council meeting yesterday that the approval would be followed with a request to the National Assembly for endorsement and subsequent implementation.

According to Adeosun, these obligations largely consist of dues owed to state governments, oil marketers, power generation and distribution companies, suppliers and contractors by FG parastatals and agencies, payments due under the Export Expansion Grant (EEG), outstanding judgement balances as well as pension and other benefits to Federal Government employees.

She explained that some of the obligations date back to 1994. The resolution of this will significantly enhance liquidity in critical sectors of the economy.

The minister said supplier and contractor obligations would be resolved through a strict process of final validation, following which those confirmed will be settled through the issuance of liquid promissory notes with (ten-year tenure).

She said this would also be phased over a three-year period to minimise impact on liquidity with preference given to those willing to offer the largest discounts.

These obligations, she said will then be incorporated into the Medium-Term Expenditure Framework by the Ministry of Budget and National Planning.

Also yesterday, FEC approved the award of a N159 million contract for the engineering design of a sewer line to capture Katampe, Gwarimpa, Kado, and other districts of the Federal Capital Territory, Abuja.

Another contract of N2.5 billion for the completion of Kabusa road, also within the FCT, was approved.

The Minister, Mohammed Bello, explained that the contract is expected to be completed in 12 months.

Meanwhile, Acting President Yemi Osinbajo, has directed the Minister of Finance to release N1.6 billion to 15 states ravaged by floods across the country.

This, according to the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, is to help cushion the effects of the disaster on Nigerians living in the flood-prone areas.

Adesina said the money would be taken from the Federal Government’s Ecological Account domiciled in the Central Bank of Nigeria (CBN).

He said the Minister of Finance has been directed to release the money to the National Emergency Management Agency (NEMA) for onward distribution to the affected states.

The states included Ekiti, Kwara, Lagos, Bayelsa, Enugu, Edo, Sokoto, Osun, Akwa Ibom, Kebbi, Niger, Ebonyi, Abia, Oyo, and Plateau.