The House of Representatives has given its House Committee on Aid, Loans and Debt Management a mandate to investigate what it called the "rising incidence of domestic public debts" owed local contractors across the country which has so far risen above N6 trillion.

The mandate was given shortly after acceptance of the motion moved by the chairman of the Committee Hon. Adeyinka Ajayi, while presenting the findings of the committee on the subject matter.

Ajayi while presenting the findings of the committee noted that about 300,000 jobs had been lost between 2007 and 2011 due to government's indebtedness to local contractors.

The lawmaker who deplored the social and economic problems associated with excessive local debt to contractors noted that it's ironic that despite the fact the National Assembly appropriates N100 billion annually to take care of the nation's debt profile, the figure has still been on the increase.

Ajayi said that over N500 billion was being used annually to service domestic debts, adding that the House frowns at that as part of its oversight functions.

According to him, the domestic debt profile began to soar since the country exited the Paris Club debt in 2006, adding that "the structured domestic debt profile of the nation stood at N6.1 trillion, while foreign debt stood at $6.7 billion or N1 trillion naira as at March 2013".

Ajayi who said the federal government has started taking steps to curb rising domestic debt by setting of a sinking fund and retiring bonds worth N75 billion, which matured last February.

The government, he said, also plans to cut domestic borrowing to N500 billion ($3.1 billion) in 2014, as part of a general move to reduce pressure on the capital available for creating job opportunities.

He also pointed out that the budget office saddled with the responsibility of managing the debts owed to local contractors and financial institutions by various governments and MDAs had put the amount owed by government to local contractors at N74.6 billion as at October 2012, noting that it was done without any data on the amount of financial accommodation provided by local financial institutions. The lawmaker said there are indications that the figure aggregate of this debt both verified and unverified more than quadruples that figure.

According to him, "as at February 2011, the federal government was owing contractors who worked for the ministry of water resources N23 billion while contractors from the ministry of works were being owed over N60 billion. The Police Service Commission is allegedly owing its contractors over 30 billion.

"This debt accumulation is further compounded by constant and consistent lack of adequate budgetary allocation to meet our past due obligations and the non-transparent process for the settlement of debts and curbing the rise of debt to local contractors and its detrimental effect on the economy."

He said the federal government's statistic on structured domestic debt put at over N6.5 trillion was doubtful given that it does not include billions owed to local contractors by governments, and MDAs. That, according to him, creates an impression that the nation's indebtedness is within acceptable limits.

"Figures from Federation of Construction Industry (FOCI) shows that over 300,000 jobs have been lost between 2007 and 2011 due to debts owed to contractors by the federal government.

The House directed the committee to hold public hearing to investigate and collate debts owed by the federal government to local contractors and recommend ways for quick verification and settlement of these debts and report back within three weeks.