President Muhammadu Buhari has written to the House of Representatives requesting for the passage of a Bill effecting the Promissory Note and Bond Issuance Programme to clear long-standing obligations inherited by his administration.
Reading the communication from the President addressed to the House of Representatives at its plenary session on Tuesday, 27th March, 2018, the Speaker, Rt Hon Yakubu Dogara (APC: Bauchi) stated that the President had conveyed the resolution of the Federal Executive Council (FEC), requesting that National Assembly pass the bill so his administration could settle inherited local debt and to meet up with contractual obligations.
The President stated in his letter that the promissory note and bond issuance programme had become imperative to clear obligation such as ;
- Unpaid obligations to pensioners, salaries and promotional arrears to civil servants.
- Obligations to petroleum marketers.
- Contractors and suppliers debts.
- Unpaid power bills obligations from tariff reversal in 2014.
- Export expansion grant (EEG) scheme debts.
- Judgment debts.
- Refunds to state Government for projects undertaken on behalf of the federal Government.
President Buhari also explained that he had asked the National Assembly in August 2017 to amend the Fiscal Responsibility Act (FRA) to provide legal backing to the proposed promissory note and bond issuance programme due to legal stipulations in sections 41(1)(a) and 44(2)(b) of the FRA that mandate the proceeds of borrowing by Government at all tiers, to be applied solely towards capital expenditure.
However, in a separate letter also read by the Speaker of the House, the President formally withdrew the Fiscal Responsibility Act (Amendment) Bill, 2017, Proposed to provide legal backing to clear the recurrent expenditure component of obligations section 41(1)a and 44(2)b of the fiscal responsibility Act. In his view, the proposed promissory note and issuance programme Bill, now rendered the amendment of the FRA unnecessary.
