The Federal Executive Council on Wednesday gave approval for the commencement of validation and payment of two point seven trillion naira inherited debts to contractors and employee liabilities.
The obligations, which were accumulated over twenty years would be paid within three years, through bond and promissory note issuance.
Finance Minister, Mrs Kemi Adeosun, who disclosed this while briefing journalists at the end of the weekly Federal Executive Council meeting, said the aim of government is to resolve long outstanding dues and stimulate economic activity.
“We cannot get our economy moving at the pace we need to if we do not address the legacy issues we have inherited, which act as a significant drag on economic activity. The Government must be a driver of growth, and enable private sector activity,” she said.
Adeosun said the approval would be followed by a request to the National Assembly to approve the programme ahead of implementation.
She said the obligations largely consist of dues owed to state governments, oil marketers, power generation and distribution companies, suppliers and contractors by parastatals and agencies, payments due under the Export Expansion Grant, outstanding judgement balances as well as pension and other benefits to federal government employees, some of which date back as far as 1994.
The Finance Minister gave a breakdown of the liabilities to include salaries and promotion arrears of civil servants as well as other fringe benefits.
“We have an obligation to our Federal Government employees to address these long-outstanding pension and employment benefit issues. Some people have been promoted for years but are still on their old salary. We are doing this systematically, and we want to do so once and for all. We are enhancing the Government’s controls and processes to ensure we do find ourselves in this situation again,” Adeosun stated.
She further said obligations owed to individuals like pensions and employee benefits would be resolved through the issuance of specific bond instruments, phased over the next 3 years.
She also said the obligations would later be incorporated into the Medium- Term Expenditure Framework by the Ministry of Budget and National Planning.