It should be expected that the unpaid contractual debts and outstanding welfare like pensions by the Government valued at N2.7 trillion has contributed to the increased non-performing Loans in the banks. The Finance Minister, Kemi Adeosun, admitted this and stated that these debts need not be prolonged anymore.
Some dates back to 1994, while the obligations include money owed to state governments, contractors, oil marketers, as well as power generation and distribution companies. This development will bring liquidity back to the backs and relieve to the debtors once the payment process, which is now awaiting legislative action is completed.
The ministry’s Director of Information, Salisu Na’Inna Dambatta, shared that “The government cannot allow this level of inherited obligations to go unresolved any longer. As part of the process to reset the economy, we must address these legacy issues once and for all.
“The contractor obligations have a significant effect on private sector confidence and are a direct cause of non-performing loans (NPLs) in the banking sector.
“We are embarking on a significant programme of capital expenditure and to optimize the contracting process and deliver maximum value for Nigerians, we cannot have these legacy issues constraining us”.
She said that paying the debts now would be in the interest of the government and economy, as a way to restore private sector confidence in government while embarking on a range of capital projects.
On the regime of transparency and building confidence among civil servants, the minister pointed out that pension and employee benefit arrears are simply unacceptable.
“We rely heavily on the hard work and dedication of our civil servants, which is even more important as we implement and deliver the reforms we need to make government more efficient. We must demonstrate a willingness to ensure their issues and concerns are addressed, and this solution does that.