The disagreement between the Federal Government and the Governors over the Paris Club refund deduction seems to be intensifying as the Chairman of the Nigerian Governors Forum (NGF) Kayode Fayemi, has opposed the Federal Government’s plans to make deductions from the federation account for payment of consultants for the Paris Club Refund.
This is as there are reports of a deadlock at the Federation Account Allocation Committee (FAAC) meeting following the states’ opposition to the commencement of deduction of $418 million to pay private consultants for the Paris Club refund, according to ChannelsTV.
The move by the Federal Government is projected to affect the recurrent expenditure of at least 33 states who may not be able to pay the salary of their workers.
What the Chairman of NGF is saying
Fayemi, who is also the Governor of Ekiti State, made this known while fielding questions from journalists on the sidelines of the 27th Nigerian Economic Summit in Abuja on Tuesday. He said that due to this reason, the state governors are not in support of the decision.
Fayemi criticized a situation where the Federal Government makes arbitrary deductions without the input of state governors adding that they have agreed not to collect any allocation from the Federation Allocation Account (FAAC) until the issues are resolved.
The Governor said, “We are dealing with the issue. We would find a resolution to it. As far as states are concerned, they do not accept that funds belonging to federation account could just be arbitrarily deducted without the input of the states, and that’s why we are insisting that until this is clarified, we would rather leave the money in the pool until we have all agreed on the direction.’’
What you should know
Recall that the Federal Government had in 2006 paid $12 billion to get an $18 billion debt write-off by the Paris Club of international creditors.
After realising that the payment was made directly from the revenue accruing to the entire federation, states and local governments that did not owe the Paris Club demanded a refund.
Some consultants claimed a percentage of the refund as payment for services they said they rendered to the states and local government councils. Some of the contractors also claimed that they executed projects across the country for the Association of Local Governments of Nigeria.
The governors, therefore, insisted on a forensic audit, while the contractors and consultants went to court.
The Attorney-General of the Federation, Abubakar Malami, negotiated an out-of-court settlement with the contractors and consultants with the sum of $418,953,670.59 agreed as the judgment debt.
The Nigeria Governors’ Forum subsequently went to court to stop the payment of the controversial sum to the consultants.
The governors have opposed the Paris Club deduction.