The Federal Government yesterday appointed three local banks among other financial institutions as transaction advisers for the issue of its N3.4 trillion of promissory notes that will be deployed to settle a backlog of state obligations, the Finance Minister, Zainab Ahmed said on Wednesday.
Ahmed had presented a memo to Federal Executive Council which met in Abuja on Wednesday seeking approval for the notes, which she said would help revive the Nigerian economy battling low growth since emerging from its first recession in 25 years in 2017.
According to the Central Bank of Nigeria, (CBN), the nation’s Gross Domestic Product (GDP) growth should reach 3 percent in the first quarter, buoyed by election and government spending, compared with 1.9 percent last year.
“Council today approved our memo seeking the approval for the appointment of seven transaction parties for the payment of N3.4 trillion local debt,” Ahmed told reporters in the capital, Abuja, after a cabinet meeting.The obligations to be settled by the government include pension liabilities, unpaid salaries, accrued fuel supply interest and debt owed to contractors, according to her memo.
The transaction advisers include Zenith Bank, Access Bank , United Bank for Africa, and some merchant banks and law firms, she said.
Nigeria, which has Africa’s biggest economy, had planned to issue a 10-year promissory note to offset 2.7 trillion naira of debt owed to government contractors and employees, but the programme had to be approved by parliament.
Ahmed said on Wednesday that parliament approved the note issuance program, which would help the government to account properly for its liabilities, as at December.
The government has said it found unrecorded debts of N2.2 trillion left over from the previous administration after an audit aimed at improving transparency.
Nigeria has borrowed abroad and at home over the past three years to help to finance its budgets and infrastructure projects, but debt servicing costs are rising atronmically.