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By Henry Umoru & Joseph Erunke

ABUJA—THE Senate yesterday asked the Federal Government to urgently put in place measures for the immediate payment of N2 trillion owed local contractors.

The Upper Chambers also said it was worried that failure to do this would spell doom for the banking and financial services sector.

The Senate equally urged the Federal Government to appraise its indebtedness to the local contractors, even as it expressed concern that the nation’s domestic debt as at June 30, 2016, stood at N10 trillion.

The resolutions of the Senate were sequel to a motion by Senator Oluremi Tinubu, APC, Lagos Central, titled, The urgent need for the Federal Government to redeem local contractors debts and co-sponsored by Senators Shehu Sani, APC, Kaduna Central; Solomon Adeola, APC, Lagos West; David Umaru, APC, Niger East; Gbenga Ashafa, APC, Lagos East and Magnus Abe, APC, Rivers East.

Presenting the motion, Senator Tinubu said the Nigerian economy was experiencing difficult times caused by a slump in oil prices, with the result that a negative GDP (it shrank by 0. 36% in the first quarter, 2. 06% in the second quarter, and 2. 24% in the third quarter) was recorded in three consecutive quarters of 2016.

According to her, there has been an increase in the rate of unemployment and prices of goods.

She added that the Central Bank of Nigeria’s (CBN’s” report on the Federal Government’s indebtedness to the local economy was impacting the current economic situation.

Senator Tinubu said: “The senate: Notes that the Nigerian economy is experiencing difficult times caused by a slump in oil prices, with the result that a negative GDP (it shrank by 0.36% in the first quarter, 2.06% in the second quarter, and 2.24% in the third quarter) was recorded in three consecutive quarters of 2016. As a result there has been an increase in the rate of unemployment and increase in prices of goods;

“Further Notes with interest, the CBN’s report on the Federal Government’s indebtedness to the local economy and its effects in protracting the current economic situation;

“Disturbed that further delay in servicing these debts may adversely affect business organisations. Owing to the fact that many businesses are indebted to banks, further delay may subsequently affect financial organisations;

“Further notes that a publication contained in the guardian newspaper of Tuesday, 10th January, 2017 alleges that banks are being owed over N465 billion by oil importers alone. Disturbed because it is also alleged that the mounting debts owed to the banks is as a result of failure of the Federal Government to pay outstanding subsidy arrears before entering into the new oil pricing regime.

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