The Minister of Finance, Mrs. Kemi Adeosun, said on Tuesday that the Federal Government would settle the inherited debts and contractual obligations to local contractors between 2006 and 2015.

The Minister made this known while appearing before the Ad-Hoc Committee of the Senate on “Promissory Note Programme and Bond Issuance”.

The Committee is chaired by the Deputy Chief Whip, Senator Francis Alimikhena.

She explained that the debts owed to various classes of contractors, including the terminal benefits of ex-Nigerian Airways workers, would repaid through promissory notes and bonds issuance.

The Minister stated that the unpaid Federal Government obligations constituted a drag on economic activity across many sectors, adding that the present Administration was determined to address the problem.

She listed the unpaid obligations to include obligations to pensioners and salary & promotion arrears to civil servants; obligations to contractors and suppliers who in turn, owe banks increasing the quantum of non-performing loans, and unpaid electricity bills by the Ministries, Departments and Agencies (MDAs).

Others are: exporters owed funds under the Export Expansion Grant Scheme and unpaid refunds due to State Governments in respect of projects undertaken on behalf of the Federal Government.

“The Federal Government is working towards settling these inherited debts. The Small and Medium scaled Enterprises are the lifeline of our nation. The Federal Government will be stimulating the economy by paying these legacy debts,” Adeosun told members of the Ad-Hoc Committee.

The Federal Government, according to her, has approved the issuance of promissory notes and bonds to settle its contractual obligations subject to the approval of the National Assembly.

On the ex-Nigerian Airways workers, the Minister explained that their terminal benefits were reconciled and agreed at N45 billion following verification.

She debunked claims by the ex-workers that there was a presidential approval for the payment of terminal benefits of N45 billion to the workers.

“There has been a misconception in the media that the President had approved the payment of N45 billion terminal benefits to the workers. There is no presidential approval and no appropriation yet for the payment of N45 billion to the ex-workers,” she said.

Earlier, the representative of the Accountant General of the Federation, Mr. Mohammed Usman, had told members of the Senate’s Ad-Hoc Committee that the Government paid N34.2 billion to clear the promotion arrears to workers in the MDAs.

Usman, who is the Director of Funds in the Office of the Accountant General of the Federation, added that the payment process was still ongoing.

“These payments were made to the accounts of the beneficiaries in the MDAs after detailed verification of all documents attached as proof of promotion,” he said.