Nigeria Plans To Issue 3.4 Trln Naira Promissory Note To Pay Off Local Debt

Nigeria plans to issue 3.4 trillion naira in Promissory Note to settle local debt owed to contractors and other contractual obligations inherited by the current government, its finance minister has said.
“As at December 2018, the National Assembly had approved the Issuance of Promissory Notes to two (2) creditor categories from the Programme," Zainab Ahmed said.
She said the government plans to refund 488.74 billion naira to 21 state governments for projects executed on behalf of the Federal Government.
She also said that the promissory note of 348 billion naira will cover payment to Oil Marketing Companies (OMCs) for Fuel Supply Accrued Interest and Foreign Exchange Differentials
Ahmed submitted fresh memo to the cabinet meeting for approval additional items which include;
Refund to two (2) State Governments (Delta and Taraba States) – 90.24 billion naira;
Payment for six (6) Contractors – 206.065 billion naira and,
Payment of Exporters Claims under the Export Expansion Grant (EEG) Scheme – 195.089 billion naira.
The finance minister disclosed that Transaction Parties would be appointed for the Programme while a total of 689.96 million naira (including Fees and Expenses to the Transaction Parties) would be incurred in the course of implementing the Programme and that the funds be sourced from proceeds of FGN Securities Issuance.
Ahmed said the country is also seeking a concessionary facility of $6.8 million from the African Development Bank (AfDB) to finance inclusive basic service delivery and livelihood empowerment integrated programme for the rebuilding of the North-East.
The facility was a concessionary loan with an interest rate of one per cent and payable over a 30-year period with five years moratorium.
“There was a previous facility which included coverage of Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe states, and some specific institutions were beneficiaries. But there is a Federal Science and Technology College in Lassa, Borno State that was one of the beneficiaries. But because of 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.