…says programme will cover verified liabilities, curb rising interest and penalties
By Gloria Ikibah 
The Federal Government has asked the National Assembly to approve the establishment and expansion of its Promissory Note Programme to settle outstanding liabilities worth N269.446 billion owed to various creditors.
The request was conveyed in a letter signed by the Secretary to the Government of the Federation, Senator George Akume, and read by Speaker of the House of Representatives, Abbas Tajudeen, during Tuesday’s plenary.
In the letter, the government said the proposed programme would provide a structured mechanism for settling verified contractual, project-related and other financial obligations inherited or accumulated by the Federal Government.
Akume wrote: “I write to convey the compliments of His Excellency, President Bola Ahmed Tinubu, GCFR and transmit for the consideration and approval of the National Assembly the request for the establishment and expansion of the Federal Government of Nigeria Promissory Note Programme for the settlement of outstanding and verified liabilities of the Federal Government.
“The request arises from the need to address the identified outstanding obligations owed to the various categories of creditors, as detailed in the accompanying schedule and supporting documentation.”
According to the letter, the outstanding liabilities amount to N269,446,402,822.56.
The SGF explained that the claims followed a comprehensive review by the relevant ministries, departments and agencies, after which President Bola Tinubu approved the proposal to use promissory notes to facilitate their settlement.
“The liabilities comprise obligations arising from outstanding contractual, project-related and other verified financial commitments of Government, with an aggregate verified amount of Two Hundred and Sixty-Nine Billion, Four Hundred and Forty-Six Million, Four Hundred and Two Thousand, Eight Hundred and Twenty-Two Naira, Fifty-Six Kobo (269,446,402,822.56).
“Following a comprehensive review of the outstanding obligations by the relevant Ministries, Departments and Agencies and in furtherance of the Federal Government’s commitment to the orderly settlement of legitimate obligations, His Excellency, Mr. President, has considered and approved the proposal for the establishment and expansion of the Promissory Note Programme to provide an appropriate mechanism for the settlement of the liabilities,” he stated.
The government said the programme would ensure that only legitimate claims that had been properly verified and validated were admitted for settlement.
“The proposed Programme is intended to provide a structured, transparent and fiscally responsible framework for settling the outstanding obligations, while ensuring that only duly verified and validated claims are admitted for settlement,” the letter stated.
Akume said implementation would comply with existing laws, financial regulations and established public debt management procedures.
He noted that the initiative was also intended to prevent the continued accumulation of interest, penalties and other financial costs arising from unpaid obligations.
“The proposal is also intended to mitigate the continued accumulation of interest, penalties and other financial costs associated with the outstanding liabilities, while providing relief to affected creditors and strengthening confidence in the Federal Government’s commitment to honouring legitimate contractual and other obligations,” he said.
The SGF explained that the Federal Government had previously used the Promissory Note Programme to settle inherited domestic debts and contractual obligations.
According to him, the earlier programme received Federal Executive Council approval before being submitted to the National Assembly for legislative approval in line with the applicable fiscal and public debt management framework.
Under the latest request, the government is seeking approval to issue promissory notes totalling N269.446 billion, or another amount the National Assembly may approve, to settle the verified liabilities contained in the accompanying schedule.
It is also seeking legislative approval to include the identified categories of liabilities and beneficiaries in the programme, subject to final verification, reconciliation and certification by the relevant government agencies.
The request further seeks authorisation for the Minister of Finance and Coordinating Minister of the Economy, working with the Debt Management Office and other relevant agencies, to take the necessary steps to implement the programme.
Akume said the arrangement would enable the government to settle its obligations without placing an immediate and disproportionate burden on its cash flow.
“The proposed arrangement is expected to facilitate the orderly settlement of the outstanding obligations without imposing an immediate and disproportionate cash-flow burden on the Federal Government.
“It will also support fiscal planning by spreading the associated repayment obligations over an appropriate tenor, consistent with the principles of prudent debt management”, he stated.
The government, however, stressed the urgency of the request, citing the age and size of some outstanding liabilities and the risk of further increases in interest and related costs.
“In view of the magnitude and age of some of the outstanding liabilities, as well as the potential for further accumulation of interest and associated costs, the matter requires urgent consideration and approval by the National Assembly,” the letter stated.
Akume added that early legislative approval would allow the government to begin the necessary processes for issuing the promissory notes and resolving the outstanding claims.
“Early legislative approval will enable the Federal Government to commence the necessary processes for the issuance of the Promissory Notes and bring closure to the affected liabilities,” he said.
The SGF disclosed that a detailed schedule containing the categories of liabilities, beneficiaries, amounts involved and supporting documents had been forwarded to the National Assembly for consideration.
He urged the House to give the request prompt attention, saying the proposed programme would support fiscal sustainability, enable the government to honour legitimate obligations and strengthen confidence in the Nigerian economy.
“I trust that the House of Representatives will accord this request the expeditious consideration it deserves in the national interest and in support of the Federal Government’s efforts to strengthen fiscal sustainability, honour legitimate obligations and promote confidence in the Nigerian economy,” Akume stated.
