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FG to redeem N31. 4bn debts owed states

Posted by on February 16th, 2021 at 4:02 pm 👏 Drop Comment
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    By Nduka Chiejina (Assistant Editor)

    The federal government will Thursday release over N31.4 billion to the state governments in keeping with its obligations to service its debits.

    The State Governments will be credited with N31, 440,652,571.00 when the promissory notes issued to them by the federal government on February 18, 2019, matures.

    A source at the Debt Management Office (DMO) told The Nation that the federal government has already made provisions to redeem its matured promissory notes in the 2021 budget.

    On Thursday, the state governments will have the option of collecting their money of “roll it over”.

    February 18, 2021, matured promissory notes have been discounted by the federal government.

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

    What this means is that the federal government has been borrowing from the state governments by issuing promissory noted 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 will the federal government will pay out on April 30, 2021, to Oil Marketing Companies that are government agencies.

    READ ALSO: Anxiety over Nigeria’s rising public debts

    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 to redeem matured January 2021 Eurobond.

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

    In 2021, the federal government will spend N3.12 trillion to service debts.

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