Economy

Debts: FG sets to release N31.4 bn to state governments

The Federal Government is set to release over N31.4 billion to state governments in keeping with its obligations to service its debts.

The state governments will be credited with N31,440,652,571 tomorrow when the promissory notes issued to them by the government on February 18, 2019 matures.

A source at the Debt Management Office (DMO) said that the government had made provision to redeem its matured promissory notes in the 2021 budget, The Nation reports.

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

The 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 on May 24, 2021.

This means the government has been borrowing from state governments using promissory notes backed by good faith.

Other redeemable promissory notes that will become due in a few months include N44,488,038,738 which the government will pay out on April 30, 2021 to government oil marketing firms.

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; N12,221,147,926 and N12,086,954,965.

In recent times, the Federal Government has embarked on a spate of debt servicing activities, which include the release of $500 million to redeem matured January 2021 Eurobond.

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