President Bola Tinubu has formally approached the Senate to seek approval for a N100.5 billion promissory note program. This financial arrangement is designed to reimburse the Yobe State Government for the expenses incurred in constructing the Muhammadu Buhari International Cargo Airport in Damaturu.
In a letter addressed to the President of the Senate, Tinubu sought legislative backing for the Debt Management Office (DMO) to establish and issue the promissory note programme. The specific sum requested stands at N100,509,017,234.55.
According to the communication, the Federal Executive Council (FEC) approved the Federal Government’s takeover of the airport and the subsequent project cost reimbursement during its second extraordinary meeting on May 23, 2023.
Additionally, the Bureau of Public Procurement (BPP) reviewed the project and cleared the recommended amount.
“In the light of the foregoing, I urge the Senate to consider and approve the establishment and issuance by the Debt Management Office of a promissory note programme in the sum of N100,509,017,234.55,” the President wrote, urging the lawmakers to expedite their consideration.
Following the reading of the letter on the floor of the upper legislative chamber, the Senate referred the request to its relevant committee for further legislative scrutiny.
The final outcome of the legislative process will determine the implementation timeline for settling the financial commitment with Yobe State.
What You Should Know
This development follows a decision by the Federal Executive Council (FEC) to take over the Damaturu airport and compensate Yobe State for its construction costs. A promissory note is essentially a government-backed IOU that ensures the state receives its money over a set period through the Debt Management Office.
- Positive Impact: Reimbursing Yobe State injects over N100 billion back into the state’s treasury, potentially funding other critical infrastructure and social services. It also confirms the Federal Government’s commitment to supporting state-led projects that have national strategic value.
- Potential Concerns: The issuance of promissory notes increases the Federal Government’s domestic debt profile. Additionally, the timeline for the state to convert these notes into liquid cash depends on the terms of the program and the prevailing financial market conditions.
