The Debt Management Office (DMO) is accelerating the implementation of the Promissory Note Programme and Bond Issuance to settle inherited local debts and contractual obligations due to various categories of creditors, including oil marketers.
The measure is intended to stave off any intended confrontation with oil marketers and other creditors, a statement from the DMO has said. It added that the Programme will be implemented in accordance with the process approved by Federal Executive Council (FEC).
According to the statement, “the claims by oil marketers are for accrued interest and foreign exchange differentials,” pointing out that whilst some of the issues involved in the implementation of the Programme have been explained to representatives of the oil marketers, the DMO nevertheless, has invited the oil marketers to a meeting this week to explain the process to them and provide a status report.
FEC approved the establishment of the Promissory Note Programme and Bond Issuance to settle inherited local debts and contractual obligations due to various categories of creditors, including oil marketers in July 2017.
These represent unpaid obligations carried over from previous administrations.
The DMO said “the amounts presented to FEC and subsequently to the National Assembly, were derived by simply collating figures from various MDAs in order to kick-start the process.”
However, given that these were largely unverified amounts, the DMO explained that “it became prudent on the part of Government to include processes that would be adopted in the implementation of the Programme that would ensure transparency and Value for Money before the Promissory Notes are issued.”
One of such processes is the validation of the amounts against each creditor by an International Accounting Firm operating in Nigeria.
“Based on the approval by FEC, the DMO initiated steps towards the implementation of the Programme, one of which is the appointment of advisers using the provisions of the Public Procurement Act, 2007” the release said.
However, since the Programme involves the issuance of Sovereign debt instruments, which require the approval of NASS, as provided in the Fiscal Responsibility Act, 2007, there was a limit to what the DMO could do without a NASS approval. The required NASS approval was only received on September 26, 2018 through a letter from the Clerk of the National Assembly.