FG has discovered unrecorded debts N2.2tn ($7.22bn) left

The Federal Government has discovered
unrecorded debts of N2.2tn ($7.22bn) left
over from the previous administration.
It said in a tweet that the debts were
uncovered after an audit aimed at
improving transparency, Reuters reported on
Tuesday.
“(The) N2.2tn unrecorded debt(s) owed
contractors/private sector found on (the)
Federal Government’s books, inherited from
previous administration,” the message,
posted on twitter, stated.
The Minister of Finance, Mrs. Kemi
Adeosun, had on Sunday said in a
statement that the debts were owed to
contractors, oil marketers, exporters and
electricity distribution companies.
Adeosun said they would be settled by
issuing a 10-year promissory note.
President Muhammadu Buhari has vowed to
restore financial sanity in Nigeria, accusing
previous governments of throwing the rule
books “to the dogs,” according to Reuters .
The debts amount to 2.3 per cent of the
nation’s Gross Domestic Product, according
to analysts at Ecobank. Nigeria has a debt-
to-GDP ratio of 16.6 per cent.
The Ecobank analysts said investors might
worry about the potential of more debt to
emerge, with oil receipts and foreign inflows
declining, which could push up Nigeria’s
bond yields and increase the government’s
cost of servicing its debt.
The Federal Government planned a record
N6.06tn budget for this year, but it has
struggled to fund it.
It now plans to increase the 2016 amount
by 20 per cent for next year’s budget to
help lift the economy out of recession.
The Federal Government had last week
named Citigroup, Standard Chartered Bank
and Stanbic IBTC Bank to manage a
planned $1bn Eurobond sale and hopes to
start the issuance process in January.
The country is facing its worst economic
crisis in 25 years, brought on by low oil
prices, which have slashed government
revenue, hammered the naira and caused
chronic dollar shortages, thereby frustrating
businesses.