Buhari’s successor to grapple with judgment debts listed in promissory notes
By Jeph Ajobaju, Chief Copy Editor
President Muhammadu Buhari may leave behind at least $715.86 million judgment debts for his successor, as contained in the “Schedule of Promissory Notes Issued by Category as at March 2022” produced by the Debt Management Office (DMO).
The document listed 18 promissory notes as of March 22, but both the notes and the total amount are likely to increase with Buhari piling on national debts in the run up to 29 May 2023 when he will serve out his second and final term of office.
Investopedia.com defines a promissory note is a debt instrument that contains a written promise by one party (the note’s issuer or maker) to pay another party (the note’s payee) a definite sum of money, either on-demand or at a specified future date.
Section 4 of the Government Promissory Notes Act says, “The principal sums and interest represented or secured by any Government Promissory Notes are hereby charged upon and shall be payable out of the general revenue and assets of the Federation.”
One of the 18 promissory notes to judgment creditors matured on 11 August 2022, another matured on 15 October 2022.
The remaining 16 will mature at different times between 15 October 2023 and 15 October 2031.
Abuja is expected to pay off five promissory notes worth N311.73 billion which will mature in 2022.
Payment for three promissory notes will be made to state governments, two to judgement creditors.
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Pending court cases
Abuja is facing several court cases filed in the past two years by local and foreign entities over alleged breaches of contracts which may cost the treasury N7.58 trillion if it loses the cases, per The PUNCH which investigated the judgment debts.
Federal Attorney General and Justice Minister Abubakar Malami disclosed in September the government agreed to pay a foreign investor $496 million to settle a long-standing $5.26 billion contractual dispute.
He said the mediation was done under the alternative dispute resolution framework of the International Chamber of Commerce led by Phillip Howell-Richardson, and that the settlement agreement came into effect on 19 August 2022.
The $496 million settlement when added to $715.86 million promissory notes to judgment creditors raises the total figure to $1.21 billion.
Cases poorly handled
“Most cases against the government are due to negligence and poor handling, leading to judgment against the government even where there could have been no judgment because it has been poorly defended,” Olu Daramola SAN, from Afe Babalola’s Chambers, told The PUNCH.
“But unfortunately, the tragedy is that when you file a case against the government, they may not bother until you get a judgment.
“When you already have a judgment, negotiations become difficult 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 awarded in court, definitely you won’t be willing.”
Sam Erugo, a Professor and SAN, said it should disturb citizens the government faces continuous threats and penalties or liabilities for breaching construction contracts.
“Nobody will be happy to see that funds that are supposed to be used for other things are being used for settlement of litigation expenses,” added Matthew Burkaa, another legal practitioner.