Nigeria plans issue of 10-year note of N2.7tr to offset debts

The Federal Government of Nigeria plans to issue a 10-year promissory note to offset
N2.7trillionnaira ($8.85 billion) owed to government contractors and employees, Finance
Minister, Mrs Kemi Adeosun said this on Wednesday.
Nigeria, Africa’s biggest economy, is in the second year of a recession caused by low crude oil prices and attacks by militants on facilities in its Niger Delta energy hub. Oil sales account for 70 percent of government revenues.
Several states around the country raised money on the domestic bond market and from banks to fund infrastructure projects at the peak of oil prices. But as crude prices plunged many have found themselves unable to pay bills or salaries.
A total of 2.7 trillion naira is outstanding, Finance Minister Kemi Adeosun told reporters in the capital, Abuja, after a cabinet meeting. Money is owed to state governments, contractors and oil marketers, she said, as well as power generation and distribution companies.
According to her, some 740 billion naira of pension and salary arrears and 1.93 trillion naira of other obligations are also outstanding, including the one to Federal Government contractors and suppliers.
Adeosun, however, said the programme requires final approval from the National assembly.