Local contractors’ debts hit N2trn

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…Senate urges FG to work out repayment plan

From Fred Itua, Abuja

The Senate, yesterday, revealed that local contractors’ debt in the country has risen to over N2 trillion. The debts, the Senate noted, are those owed contractors operating in the oil and gas sector, as well as others in the pharmaceutical industry.
This is even as the Senate President, Bukola Saraki, warned that the inability of the Federal Government to repay its debts would adversely affect the economy.
Saraki noted that, “the inability of the government to pay its debts will have serious impacts on our economy. In a motion entitled, “The urgent need for the Federal Government to redeem local contractors’ debts” and sponsored by Senator Oluremi Tinubu, the Senate expressed worry that the inability of the Federal Government to repay these debts was negatively affecting the economy.
Senator Tinubu said any further delay in servicing these debts may adversely affect business organisations operating in the country. She said owing to the fact that many businesses are indebted to banks, further delay may subsequently affect financial organisations, especially banks.
Senator Tinubu explained: “The inability to repay subsisting bank loans may affect the purchasing power of petroleum marketers, thus creating scarcity of petroleum products. I am further concerned about the alleged failure to pay debts owed to pharmaceutical companies and the impact this may have on the health sector.
“The data released by the Debt Management Office (DMO) put Nigeria’s domestic debt as at June 30, 2016, at over N10 trillion. Local contractors’ debt is estimated to amount to an additional N2 trillion.

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