FG releases N516.4 billion as second tranche of Paris Club refunds

State governors owing salaries and pensions may have cause to smile as the Federal Government has released N516.38 billion as the second tranche of the Paris club refunds. The Paris club refunds were payments of over deductions made from their Federal Account Allocation Committee (FAAC) for external debt servicing from 1995-2002.

A sum of N522.74 billion was paid as the first tranche in November 2016. The refunds were made on the condition that 50% would be used to settle salaries and pensions. Excluding the second tranche, about N1.75 trillion has been given to the states and the FCT as bailout/intervention funds since the inception of the Buhari administration.

The Paris club is an informal group of lenders formed in 1956 with headquarters in Paris. The group was formed to deal in a coordinated manner debts owed its member countries by developing nations. Nigeria reached an agreement with the club in 2005 to pay off $12 billion in exchange of the club writing off its debt. Some states had however been over charged.

Payments in the first tranche had been surrounded with controversy as the FG was initially unwilling to release details of the payments on a state by state basis. The Economic and Financial Crimes Commission (EFCC) also investigated staff off the Nigerian Governors Forum (NGF) over payments made to consultants, and one of the state governors allegedly diverting the refund meant for his state.

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