CrossRiverHub.ngManagement Information Systems (MIS) Officer at Humanity Without Borders Empowerment Initiative (HUWIB) has uncovered that President Bola Tinubu’s administration is expected to allocate approximately N341.23 billion towards settling judgment debts from 2023 to 2027, as detailed in a document titled, ‘Schedule of Promissory Notes Issued by Category as at September 30, 2022,’ by the Debt Management Office.
These judgment debts, categorized as promissory notes, are financial obligations where one party commits to paying a specific sum of money to another party either upon request or at a designated future date. According to Investopedia.com, these promissory notes are covered under the Government Promissory Notes Act, charging that such debts are paid from the general revenue and assets of the federation.
Among the 21 promissory notes associated with judgment creditors, 12 are slated to be settled during the four-year tenure of the current administration. Two of these debts are denominated in naira, costing roughly N39.07 billion, while the remaining debts will be paid in dollars, tallying up to $393.89 million (approximately N302.61 billion using the Central Bank of Nigeria’s exchange rate of N768.27/$).
The initial judgment debt of $1.58 million is set to be resolved by August 11, 2023, with the rest scheduled for settlement between October 15, 2023, and February 15, 2027.
Notably, the previous administration under President Muhammadu Buhari might transfer at least $715.86 million in judgment debts to the succeeding administration. Furthermore, the Federal Government is grappling with numerous court cases pertaining to alleged breaches of contracts. If these cases result in unfavorable judgments for Nigeria, the nation could potentially incur liabilities amounting to approximately N7.58 trillion.
In a conversation with CrossRiverHub.ng, legal experts expressed their concerns regarding the government’s approach to handling legal matters. Olu Daramola (SAN) from Afe Babalola’s Chambers highlighted the lack of proper defense by the government, often leading to unfavorable judgments due to negligence and poor handling of cases.
Professor Sam Erugo (SAN) raised alarms about the consistent threats and impending penalties faced by the Federal Government over alleged breaches of construction contracts. Additionally, Matthew Burkaa, a senior legal practitioner, emphasized the impact of using funds meant for other purposes to settle litigation expenses.
As President Bola Tinubu’s administration confronts these substantial judgment debts, Nigerians eagerly await the outcome of these financial obligations and their potential impact on the nation’s fiscal landscape.