FG to Revive Economy via Issuance of N3.4trn Promissory Notes
By Dipo Olowookere
Promissory notes worth N3.4 trillion would be issued by the federal government under a Promissory Note Programme to settle some inherited local debts, the Minister of Finance, Mrs Zainab Ahmed, has disclosed.
Addressing reporters at the end of the Federal Executive Council (FEC) meeting on Wednesday, the Minister said already, the council has approved the issuance of the notes.
According to her, the promissory note programme will provide stimulus to the economy and unlock investment across a number of sectors currently having liquidity issues.
She added that the issuance will have an immediate positive impact on the non-performing loan ratios of banks which will, in turn, increase the banks capacity to lend and consequently improve the nation’s economy, which is presently in recovery mode after a recession in 2016.
Mrs Ahmed said some of the creditors are pension liabilities of N400 billion, unpaid salaries and third party deductions worth N24.95 billion,; staff claims valued at N270 billion, contractors claims worth N45.36 billion, fuel supply accrued interest and foreign exchange differentials valued at N514.29 billion and part of state governments claims worth N487.85 billion.
Others are Ministry of Health outsourced liabilities worth N9.04 billion, major contractors worth N596.51 billion, Export Expansion Grant (EEG) Scheme valued at N350.12 billion; judgement debt of N112.96 billion; DISCOS debt worth N26.71 billion and GENCOS debt valued at N495.67 billion.
Also at the briefing yesterday, the Minister disclosed that an approval for a $6.8 million loan from the African Development Bank (AfDB) has been granted by FEC,
She explained that the loan would be used to finance inclusive basic service delivery and livelihood empowerment integrated programme for the rebuilding of the North-east.
According to her, there was a previous facility which included coverage of Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe States, and some specific institutions were beneficiaries.
She, however, noted that the programme has suffered because of the insurgency in the area.
“But because of the insurgency, it suffered severely. It could not be carried out because of the activities of insurgents.
“Now, what we are trying to do is to go back to the projects, to this particular institution to make sure we are able to rehabilitate the institution and also undertake a complete skill, training and educational project that will mitigate against the challenges that the institution has had.
“The facility is a concessionary loan. It has an interest rate of one per cent and it is payable over a 30-year period and it has five years moratorium,” she said.