Local Debts Killing Economy, Senate Tells FG

• Local Debts Killing Economy, Senate Tells FG

The Senate, on Tuesday, asked the Federal Government to settle all its debts to local contractors in the interest of Nigeria’s economy.

The upper chamber of the National Assembly, specifically, “Urge the Federal Government to appraise its indebtedness to the local contractors; and urge the Federal Government to propose a framework and repayment plan for servicing of these debts.”

The lawmakers, while lamenting the plights of local contractors owed by the government, made reference to a report by the Central Bank of Nigeria on Federal Government’s indebtedness to the local economy “and its effects in protracting the current economic situation.”

The Senate made the call based on a motion moved by the lawmaker representing Lagos Central Senatorial District, Senator Oluremi Tinubu, at the plenary on Tuesday.

The motion was co-sponsored by Senators Shehu Sani (Kaduna Central), David Umaru (Niger East), Gbenga Ashafa (Lagos East), Solomon Adeola (Lagos West) and Magnus Abe (Rivers East).

The Debt Management Office had on February 16, 2017, said the total external and domestic debts of the Federal Government, states and the Federal Capital Territory is $57.39bn or N17.36tn.

The DMO said the the sum was made up of external debt of $11.41bn (N3.48tn) and domestic debt of $45.98bn (N13.88tn).

The office also said the domestic debt of the Federal Government, the 36 states and the FCT accounted for about 79.96 per cent of the total public debt stock, while their external debt stock accounted for about 20.04 per cent.

The Director General, DMO, Dr. Abraham Nwankwo, who appeared before the Senate Committee on Local and Foreign Debts to defend the 2017 budget estimates of the office, said the external debt profile of the Federal Government alone rose from $10.71bn in 2015 to $11.4bn in 2016, representing an increase by 6.53 per cent.

Tinubu, while moving the motion, said, “The Senate is disturbed that further delay in servicing these debts may adversely affect business organisations, owing to the fact that many businesses are indebted to banks. Further delay may subsequently affect financial organisations.”