The Senate Wednesday constituted a seven member Committee to consider President Muhammadu Buhari’s request for approval of over N2 trillion for the issuance of promissory note.
President Buhari said that the approval of the promissory note would enable government to offset inherited local debts and bond issuance to civil servants as well as contractors.
The setting up of the committee followed an Executive Communication by President Buhari to the Senate on the matter.
Senate Leader, Senator Ahmad Lawan, read the communication at plenary which sought ” the approval of a Promissory Note programme and a Bond Issuance to settle inherited Local Debts and Contractual Obligations.”
Promissory Note is a financial instrument that contains a written promise by one party (the note’s issuer or maker) to pay another party (the note’s payee) a definite sum of money, either on demand or at a specified future date.
Lawan suggested that the Senate refer the matter to the appropriate committee to deliberate.
Deputy Senate President, Senator Ike Ekweremadu disagreed and suggested that an ad-hoc committee be set up to consider the request.
Ekweremadu said, “People are depending on our approval of these funds. There are a number of issues involved. Some are the pensions, some have to do with salaries, subsidy and then some are for payment to states.
“In view of the multi-dimensional nature of the issues and the controversy regarding borrowing money to fund recurrent items which is forbidden under the Fiscal Responsibility Act, what we should do on the matter is to set up an appropriate ad-hoc committee to be able to look at this together and see which of them that can be recommended to the Senate for approval.
“While the other ones that are technically deficient or are controversial will now be sent back to the Executive for them to decide what to do depending on what that committee will recommend because under the Fiscal Responsibility Act, there is no way you can borrow money to finance a recurrent item.
“We need to set up an appropriate committee so that we are able to look at these things efficiently and be able to advice this Senate which of them that should be approved within the ambits of our law and the ones which we need to further dialogue with the Executive.”
Senator. Yahaya Abdullahi (Kebbi) in his contribution recalled that “during recession, this Senate recommended to the Executive among other things that all outstanding contracts, particularly local debts that the government should endeavour to as much as possible to settle them. We need to settle these debts so that some of these firms can start employing labour.”
Senate President, Abubakar Bukola Saraki named Senator Francis Alimikhena (Edo North) as chairman of the committee.
Other members are Senators Samuel Anyanwu, PDP, Imo East; Shehu Sani, APC, Kaduna Central; Emmanuel Paulker, PDP, Bayelsa; Danjuma Goje, APC, Gombe Central; Rafiu Ibrahim, APC, Kwara South and Monsurat Sunmonu, APC, Oyo Central.
President Buhari, had in March, written to the Senate, seeking for the approval of a promissory note programme and a bond issuance to resettle inherited local debts and contractual obligations.
President Buhari explained the obligations which he believed establishment of the promissory note and bond issuance will clear long standing obligations inherited by his administration include: a) Unpaid obligations to pensioners, salaries and promotional arrears of civil servants. b) Obligation to petroleum marketers. c) Contractors and suppliers debt. d) Unpaid power bills and obligation from tariffs reversal in 2014. e) Export expansion grant IMBET. f) Judgement debt; and g) Refunds to state government for projects undertaken on behalf of federal government.
He noted that the decision to seek the approval of the Senate is that of the Federal Executive Council, in fulfilment of the Fiscal Responsibility Act.
The letter read, “I wish to convey the resolution of the Federal Executive Council, FEC, requesting the National Assembly to pass a bill to effect the promissory note and bond issuance programme to clear the long standing obligation inherited by this administration.
“The promissory note and bond issuance programme become imperative to clear all the obligations, which include unpaid issuance obligations to pensioners, salaries and promotional arrears to civil servants, obligations to pay oil marketers, contractors and suppliers.”