The Senate has issued a stern warning on the imminent collapse of the nation’s economy due to the N5.5 trillion owed local contractors.
In a motion sponsored by Senator Oluremi Tinubu (APC) representing Lagos Central Senatorial District which was co-sponsored by five others, she explained that the country was currently experiencing difficult times by a slump in oil prices, adding that the entire quarters for 2016 witnessed a negative gross domestic product (GDP).
She noted that the situation was further worsened by trhe inability of the Federal Government to offset debts it owed its local contractors, a development she stressed reflected in Central Bank’s report.
“Further note with interest, the CBN’s report on the federal government’s indebtedness to the local economy and its effects in protracting the economic situation,” Oluremi said.
She further explained that banks were becoming short of liquid due to the N465 billion owed them by oil importers, while the sum of N856.9 billion has been put as bad debt as at 27th January, 2017, adding that it could spell doom if nothing was done to salvage the situation.
Disturbed by the domestic debt being put at over N10 trillion as at June 30, 2016 by the Debt Management Office, she emphasized that government must come up with payment plan towards liquidating N2 trillion of local contractors so as to reboot the economy.
Contributing to the debate, Senator Shehu Sani maintained that local contractors remain pivotal to economic stimulus, noting that if they are not paid, it would create economic chaos. He added that the situation has created unemployment all over the place.
In the prayers, Senate President, Bukola Saraki urged the federal government to appraise local debt with a repayment plan.