Tinubu’s govt to spend N341bn on judgment debts

According to the findings, the administration of President Bola Tinubu will most likely spend around N341.23 billion on the settlement of judgment debts between the years 2023 and 2027.

In a document titled “Schedule of Promissory Notes Issued by Category as of September 30, 2022,” which was created by the Debt Management Office, the judgment debts were presented in the form of promissory notes.

Investopedia.com defines a promissory note as a debt instrument that contains a written commitment by one party (the note’s issuer or maker) to pay another party (the note’s payee) a certain sum of money, either on demand or at a defined future date. In other words, a promissory note is a form of a loan.

According to Section 4 of the Act Relating to Government Promissory Notes, the repayment of government promissory notes is to come from the general revenue and assets of the federation.

A portion of what it said was as follows: “The principal sums and interest represented or secured by any government promissory notes are hereby charged upon and shall be payed out of the general revenue and assets of the federation.”

The current administration plans to settle 12 of the 21 judgment creditors’ promissory notes during its current term in office, which will last for four years.

While the naira is the primary currency for two of them, dollars will be used to settle the remaining ones.

The two judgment debts that are predominantly denominated in naira would cost around N39.07 billion, while the remainder, denominated in dollars, would cost $393.89 million (approximately N302.61 billion when using the currency rate provided by the Central Bank of Nigeria of N768.27 per dollar).

It was predicted that the incoming administration will pay off a judgment obligation of $1.58 million by August 11, 2023, making this the first debt that they would settle.

The remaining matters are scheduled to be resolved between October 15, 2023 and February 15, 2027.

Earlier reports suggested that the administration of outgoing President Muhammadu Buhari might potentially pass on judgment debts of at least 715.86 million dollars to the succeeding administration.

The United States Federal Government was a defendant in multiple court proceedings that involved allegations of breaching contracts. If Nigeria is unsuccessful in all of the lawsuits that have been brought against the country’s administration over the past two years by both domestic and international organizations, the country could be forced to pay out a total of nearly N7.58 trillion to settle the claims made in the lawsuits.

Abubakar Malami, who had just left his positions as Attorney General of the Federation and Minister of Justice, revealed in September of the previous year that the Federal Government had reached an agreement to pay a foreign investor $496 million in order to resolve a decades-long contractual dispute that was worth $5.26 billion.

According to statements made by the administration, the mediation sessions were carried out under the alternative dispute resolution framework of the International Chamber of Commerce and were presided over by Phillip Howell-Richardson.

Olu Daramola (SAN), an attorney working for Afe Babalola’s Chambers, stated that the government did not make a practice of defending legal disputes.

He added, “The majority of lawsuits against the government are due to negligence and poor handling, resulting to judgment against the government even where there might have been no judgment since it has been inadequately defended.” He was referring to the fact that the government had a weak defense. But the truth is that when you bring a case against the government, they might not bother until you win a decision in your favor. This is an awful reality.

“Negotiations get difficult when you already have a judgment because if you win your case in court and the person is now negotiating with you to take a smaller sum than the one that was granted in court, surely you won’t be willing to do so,” says the man. “When you already have a ruling.”

The reckless signing of contracts, the SAN explained further, was causing issues for the government.

Prof. Sam Erugo (SAN), for his part, stated that the fact that the Federal Government is regularly facing threats and imminent penalties or liabilities for purported breaches of construction contracts ought to be concerning to the residents of the country.

Matthew Burkaa, an experienced legal practitioner, was quoted as saying that “Nobody will be delighted to discover that money that are supposed to be used for other purposes are being spent for the settlement of litigation expenditures.”