The Federal Government (FG) is seeking a legal framework for the issuance of promissory note and bond to settle some financial obligations amounting to N2.7 trillion.
This is contained in a letter to the Senate President, Abubakar Bukola Saraki written by Vice President, Professor Yemi Osinbajo.
The letter dated August 4, 2017 and addressed to the Senate President was written when Osinbajo was Acting President.
Saraki read the letter on the floor of the upper chamber on Tuesday a copy of which was obtained by our reporter yesterday.
Entitled “Request for the amendment of the Fiscal Responsibility Act by the National Assembly to give effect to the proposed promissory note and bond issuance programme,” Osinbajo sought expedited treatment of the request by the Senate.
The letter read in part: “I forward herewith, for your kind consideration and passage into law, the Fiscal Responsibility (Amendment) Bill, 2017.
“The proposed amendment is necessitated by the need to commence the programme of promissory note and bond issuance to provide a final solution to the long standing issue of outstanding obligations of the Government that have been quantified at a gross amount of N2.7 trillion.
“This programme has become imperative in view of the seriousness of the accumulation of these obligations, which are inimical to Government plans to revive the economy through the provision of improved and modernised infrastructure; and, at a human capital level, the issue of pension and promotional arrears, which go back as far as 2012, is causing untold hardship among those who have served. It also adversely affects the morale of those currently in service, and on whom we depend to implement Government programmes.
“However, as you are no doubt aware, pension and salary arrears are recurrent expenditure and the Fiscal Responsibility Act 2007 (FRA) clearly stipulate in section 41(1)(a) and 44(2)(b) that the proceeds of borrowing by Government shall be applied solely towards capital expenditure.
“In this regard, I request that the National Assembly approves the proposed amendment to FRA to provide legal backing for the use of the use of the mentioned instrument in the satisfaction of the accumulated obligations.”