FG, States Owe N11.24trn As Contractors Lament N400bn Debt

The federal government, the 36 states of the federation and the federal capital territory increased their total debt stock to N11.24 trillion as at December 2014, compared to N10.04 trillion in December 2013, following massive borrowing both from the domestic market and international agencies, the Debt Management Office (DMO) has revealed.

Consequently, local contractors yesterday appealed to the federal government to pay them outstanding contractual obligations running into more than N400 billion.

The contractors, under the aegis of Local Contractors Association of Nigeria, (LOCAN), lamented that the inability of the government ministries, departments and agencies (MDAs) to pay them had placed most of them in precarious positions with, some of them facing bankruptcy and forfeiture of their property to financial institutions over borrowed funds.

The group, in a statement signed by an executive of the body, Mazi Chukwu Okeke, called on President Goodluck Jonathan to wade into the matter by directing the minister of finance and coordinating minister of the economy, Dr Ngozi Okonjo-Iweala, to substantially pay off the debts.

The contractors noted that notwithstanding tumbling oil prices, it is imperative that Mr President look in their direction and cause the minister of finance to pay a substantial part of outstanding obligations to local contractors.

“It might interest you to know that most of our members are faced with bankruptcy while others have had their property taken over by banks for failing to service loans they took for the execution of government’s projects. This is aside many families destroyed because of untold economic hardship owing to their having expended their resources on contracts execution.

“If government had succeeded in the past to settle foreign debts, then it is not too much for debts owed local contractors to be settled,” Okeke stated.

Data on the public debt stock by December 2014, and released by the DMO yesterday, indicated that the external debt,comprising federal government and states’ domestic debts, made up the bulk to the debt profile at N9.6 trillion in 2024, compared to N8.67 trillion in 2013.

Debt to multilateral agencies also rose to N1.63 trillion ($9.71 billion at the exchange rate of N168/$1), compared to $8.32 billion in 2013.

The federal government borrowed an estimated N1.2 trillion to finance its operations in 2014, the DMO said.

The recent data is an indication that government’s borrowing remained heavily concentrated on the domestic market despite its policy target to reduce the proportion of domestic borrowing in favour of foreign ones. (Leadership)