Is Nigeria’s economy running on the wheels of debt?

One may be inclined to think so.

On Wednesday, the Minister of Finance, Kemi Adeosun told Reporters after the weekly federal executive council meeting that Nigeria plans to issue a 10-year promissory note to offset a 2.7 trillion naira owed to government contractors and employees.

This means that the government will sign a document containing a written promise to pay a stated sum to the institutions it plans to borrow from at a specified date or whey want their money back.

“A total of 2.7 trillion naira is outstanding. Money is owed to state governments, contractors and oil marketers as well as power generation and distribution companies," Adeosun said.

This was long in coming. Several states around the country raised money on the domestic bond market and from banks to fund infrastructure projects at the peak of oil prices.

But as crude prices plunged, many have found themselves unable to pay bills or salaries.

Adeosun added that, “Some 740 billion naira of pension and salary arrears and 1.93 trillion naira of other obligations are also outstanding, including debts owed to federal government contractors and suppliers.”

She said the programme required final approval from national assembly.