CrossRiverHub.ng, a leading news source, has revealed that the administration of President Bola Tinubu is expected to allocate approximately N341.23bn for the settlement of judgment debts between the years 2023 and 2027. This information was gathered from a document titled ‘Schedule of Promissory Notes Issued by Category as at September 30, 2022,’ issued by the Debt Management Office.
The judgment debts, categorized as promissory notes, involve a written commitment by one party to pay another party a specific amount of money, either upon demand or at a designated future date. The Government Promissory Notes Act, Section 4, specifies that these notes are to be funded from the general revenue and assets of the federation.
Out of the total of 21 promissory notes related to judgment creditors, the current administration will settle 12 of them during its four-year tenure. While two of these notes are denominated in Nigerian Naira, the remainder will be settled in US dollars.
The two naira-denominated judgment debts are projected to cost approximately N39.07bn, while the dollar-denominated debts will amount to around $393.89 million (approximately N302.61bn using the Central Bank of Nigeria’s exchange rate of N768.27/$).
Remarkably, the first judgment debt, amounting to $1.58 million, is set to be settled by the Tinubu administration on August 11, 2023. The remaining debts will be addressed between October 15, 2023, and February 15, 2027.
CrossRiverHub.ng’s report also recalls that the former administration, led by President Muhammadu Buhari, may transfer judgment debts totaling at least $715.86 million to the incoming government. Furthermore, the Federal Government has faced a multitude of court cases concerning contract breaches. If these cases are not won, Nigeria could incur losses amounting to approximately N7.58tn.
Legal experts, including Olu Daramola (SAN) from Afe Babalola’s Chambers and Prof Sam Erugo (SAN), have highlighted the government’s tendency to poorly defend itself in cases, leading to adverse judgments. Additionally, careless contract signing has contributed to the litigation challenges faced by the government.
Matthew Burkaa, another senior legal practitioner, expressed concerns about diverting funds from essential purposes to cover litigation expenses, emphasizing the need for prudent financial management.
As the Tinubu administration grapples with these financial obligations, Nigerians are eager to witness how the government will address these judgment debts while ensuring the efficient utilization of public resources.