Finally, FG Okays N15bn For Settlement Of Local Contractors Debt

Barely two Months after local contractors stormed the headquarters of the Ministry of Finance, Budget and National Planning to protest the government’s huge indebtedness to them, the Federal Government has approved the sum of N15bn for the settlement of their debts.

The N15bn has already been provided for in the 2021 budget which was submitted by President Muhammadu Buhari to a joint session of the National Assembly.

The President said the proposed N13.08trn expenditure comprises Capital Expenditure of N3.85trn,
Non-debt Recurrent Costs of N5.65trn;
Personnel Costs of N3.76trn;
Pensions, Gratuities and Retirees’ Benefits of N501.19bn;
Overheads of N625.5bn;
Debt Service of N3.124trn;
Statutory Transfers of N484.49bn; and
Sinking Fund of N220bn to retire certain maturing bonds).

The President said the 2021 Budget deficit inclusive of Government Owned Enterprises and
project-tied loans is projected at N5.2trn, adding that this represents 3.64 percent of the budget size.

Analysis of the budget document by THE WHISTLER showed that the N15bn is captured under the budget of the Ministry of Finance, Budget and National Planning.

The amount is provided for under the Services Wide Vote segment of the Ministry of Finance’s 2021 budget.

The entire budget of the ministry including service wide vote in the 2021 fiscal period is estimated at N1.65trn.

With the provision of the amount, it is expected that the agitation of the local contractors in the payment of their debt would be brought to rest.

Local Contractors that executed validly awarded contracts in various Ministries, Departments and Agencies of the Federal Government between three to 12 years had on August 31 protested the delay of the Federal Ministry of Finance, Budget and National Planning to pay them.

The contractors who had carried various placards arrived the finance ministry at about 11:15am on that day and started protesting the non-payment of the amount owed them by the government.

They alleged that despite facts that billions of Naira have been approved and released by the Presidency to settle the liabilities, the Minister of Finance Budget and National Planning Mrs Zainab Ahmed had refused to settle the indebtedness.

The Publicity Secretary of the Local Contractors of Nigeria, Prince Dandy Rowland, told THE WHISTLER in an interview that over 5,000 Local Contractors across the Nation are passing through severe life threatening situations and hunger, while some have passed on as a result of the delay to pay them.

He said, “The Presidency inaugurated Presidential Initiative on Continues Audit in the Federal Ministry of Finance to verify the contracts we executed over the years and PICA has since verified these contracts over and over again and recommended for the settlement of the local contractors in batches, beginning with N10m downwards in order to cover a wide range of the Local contractors based on the available fund.

“Yet, Madam Finance Minister is still talking of verification every now and then, in order to manipulate the payment against PlCA’s recommendation.

“The Minister of Finance through her Special Adviser Media told us that N18bn has been released to pay us, and announced to the whole world on 8th July 2020 that the Finance Ministry would pay local Contractors between seven to 14 days from the date of the announcement.

“This empty deceptive and unfulfilled promise heightened our pressure from our creditors after the expiration of the stipulated period yet the game continued.”

He alleged that the fund being spent on the verification exercises is almost higher than the amount owed the local contractors put together.

Rowland said that these local contractors borrowed money from banks with interest and executed these contracts.

He added that government needed to release the payment to enable these contractors liquidated their debts

He added, “We are once again, calling on the Presidency to mandate the Minister Of Finance to Pay Local Contractors now or else we will remain in this protest and hunger strike before the eyes of the globe.

“Federal Government did not waste time to commission the projects we executed with borrowed money as her achievements, but now it is taking government decades to do verification for our payment. Federal Government cannot fool us forever.

“Therefore FG must pay us now, because if the reverse had been the case, if we had collected government money without executing the projects, government would have arrested and jailed us. This is Corruption of the highest order and it is unacceptable.”

He stated that due to the delay, many local contractors have died, while others have been hospitalized and cannot afford medical bills.

“Our children have dropped out of school. Many among us are facing criminal charges in various courts across the nation for funds borrowed and unable to pay back.

“Some have fled their homes for fear of being attacked by creditors and some have lost their homes to banks and creditors, he added.