Politics & Governance

FG to return N31. 4bn debts owed states on Thursday

The federal government will on Thursday release over N31.4 billion to the state governments  of the federation in accordance with its obligations to service its debts.

State governments will receive N31, 440,652,571.00 when the promissory notes issued to them by the federal government on February 18, 2019, matures which will be on Thursday 18, February, 2021 .

According to a source at the Debt Management Office (DMO), the federal government is ready with all necessary plans to redeem its matured promissory notes in the 2021 budget, as it have been discounted by the federal government.

Similarly, state governments will receive another tranche of redeemed promissory notes valued at N5, 849,212,443.00 on May 24, 2021.

This development implies that, the federal government has been borrowing from the states’ coffers by issuing promissory notes backed by the government’s good faith.

Other redeemable promissory notes that will fall due in a few months’ time include N44, 488,038,738.00 which will be paid on April 30, 2021, to Oil Marketing Companies that are government agencies.

On July 12, 2021, the federal government will redeem three notes to oil marketing companies that are government agencies, in the sum of N80,587,917,866.00; N12,221,147,926.00 and N12,086,954,965.00.
In recent times, the federal government has embarked on a spate of debt servicing activities which include the release of US $500 million which was redeemed January 2021.

According to DMO, “Nigeria’s 6.75% US$500 million January 2021 Eurobond which matured on January 28, 2021, was redeemed.

“By this development, Nigeria continues to demonstrate in practical terms, its commitment towards honouring all its debt service obligations as and when due.

“The 6.75% US$500 million January 2021 Eurobond which was issued in January 2011 was Nigeria’s first foray into the International Capital Market (ICM),” the DMO said.

It has however been confirmed that, by 2021, the federal government will expend N3.12 trillion to service debts.

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