(Ecofin Agency) - In Nigeria, the Federal Executive Council (FEC) has approved the commencement of the validation and payment of N2.7 trillion ($7.8 billion) debts owed to contractors and employee for over twenty years. This is in line with government’s effort to resolve long standing dues and stimulate economic activity.

Kemi Adeosun, the Minister of Finance disclosed this at the end of the weekly Federal Executive Council meeting on Wednesday.

According to her, the debts will be paid within three years, through the issuance of bond and promissory note.

“We have an obligation to our Federal Government employees to address these long-outstanding pension and employment benefit issues. Some people have been promoted for years but are still on their old salary. We are doing this systematically. We cannot get our economy moving at the pace we need to if we do not address the legacy issues we have inherited, which act as a significant drag on economic activity. The Government must be a driver of growth, and enable private sector activity,” she said.

Adeosun described the obligations to include debts owed to state governments, oil marketers, power generation and distribution companies, suppliers and contractors by parastatals and agencies, among others, some of which goes back as far as 1994.

She added that the payment is still subject to approval by the National Assembly.

Anita Fatunji