Nigeria’s forthcoming administration under President Bola Tinubu could find itself dealing with a substantial financial burden as it navigates a series of judgment debt settlements totaling around N341.23 billion between 2023 and 2027. These judgment debts, documented as promissory notes, have been revealed in an official document titled ‘Schedule of Promissory Notes Issued by Category as at September 30, 2022,’ published by the Debt Management Office.
A promissory note is a financial instrument that represents a written promise by one party (the issuer) to pay a specific sum of money to another party (the payee), either immediately or at a designated future date. In the case of the Nigerian government, these promissory notes are treated as legal obligations backed by the country’s general revenue and assets.
Out of the total of 21 promissory notes related to various judgment creditors, the upcoming administration is expected to settle 12 of them over the course of its four-year tenure. Notably, two of these judgment debts are denominated in Nigerian naira, amounting to approximately N39.07 billion, while the remaining debts are in US dollars, estimated to cost around $393.89 million (equivalent to approximately N302.61 billion based on the Central Bank of Nigeria’s exchange rate of N768.27/$).
The process is set to begin with the settlement of a $1.58 million judgment debt on August 11, 2023. Subsequent settlements are scheduled to take place between October 15, 2023, and February 15, 2027.
This revelation follows previous reports indicating that the administration of former President Muhammadu Buhari might pass on an even larger judgment debt burden of at least $715.86 million to the incoming government. Additionally, the Federal Government currently faces multiple court cases related to alleged breaches of contracts, which, if ruled against the government, could lead to further substantial financial liabilities.
Legal experts have pointed out that the government’s approach to defending cases has often been lackluster, resulting in avoidable judgments against it. The careless signing of contracts and inadequate handling of litigation are among the factors contributing to these financial challenges.