FG pays ₦47 billion debt to 62 contractors, says Fashola

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Minister of works

Mr. Babatunde Fashola, Minister of Power, Works and Housing, said that the Federal Government has payed a sum of ₦47.17 billion to 62 contractors out of the debt owed them.

Fashola, who stated this in Lagos on Friday at a road construction summit organised by Lafarge Africa Plc in collaboration with BusinessDay, said the debt was inherited from the past administration in 2015.

The Federal Government had said in July that it had approved ₦2.7 trillion for the payment of outstanding debts owed contractors, pensioners and oil marketers for over 20 years, adding that the beneficiaries would be settled through the issuance of liquid promissory notes of 10-year tenure phased over a three-year period to minimise the impact on liquidity.

According to the minister, the payment has made many construction companies, which had hitherto stopped work on projects or closed shops due to paucity of funds, to begin to return to sites.

He said that the President Muhammadu Buhari administration, through an inter-ministerial committee chaired by the Ministry of Power, Works and Housing, had verified the claims of the debts and the Federal Executive Council had approved a memorandum to pay them through the issuance of promissory notes subject to approval by the National Assembly.

Fashola added that the successful implementation of the debt payment solution would release money to states for more road construction and restore confidence in the construction industry, which would do more to stimulate production demand and economic growth.

Fashola said, “During the implementation of the 2016 budget, 103 construction companies executing 192 projects were paid, which employed 17,749 people directly and 52,000 people indirectly in works. What this means is that the Economic Recovery and Growth Plan is working. This much, the President of the Manufacturers Association of Nigeria attested to when he asserted that this was a plan that had their members’ input.”

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