FG urged to issue bond to clear subsidy backlog

The Federal Government has been urged to consider floating a bond program to cover the backlog of payment to oil marketers including Foreign Exchange (FX) differentials to date,

The former Chairman of defunct Enterprise Bank Ltd Mr Emeka Onwuka who made the recommendation at the book launch, titled: Dynamics of the Nigerian Financial system, in honour of Phillips Oduoza, the outgoing Group Managing Director of the United Bank for Africa (UBA), yesterday in Lagos.

While delivering his keynote address, Onwuka said, “the backlog of the amount being owed the oil marketers is largely financed by the banks, a lot of which have become outstanding in the books of the banks and pushing their nonperforming loan ratios higher.

He argued that since the government is struggling to pay, the bank should be made to subscribe to the extent of their exposure to the oil market, therefore, switching the risk assets to liquid assets in improving their balance sheet.

“The government should also consider introducing a petroleum product consumption tax that will be used to redeem the bond as they mature. This is been done in other economy. Ghana is at the verge of implementing same.”