$418m Paris Club refund: Governors suspend FAAC collection over illegal deductions
…Reject payment of consultants
…Seek delay of repayment
By Uthman Salami
The State Governors of the federation have rejected plans by the federal government to commence deduction from the federation account for the payment of consultants for the Paris Club Refund.
The Governors believe that the move by the Federal Government may hinder the recurrent expenditure of the states which may hinder them from paying salaries of their workers.
The Chairman of the Nigerian Governors Forum and Governor of Ekiti State, Kayode Fayemi spoke the mind of the Governors while fielding questions from journalists on the sideline of the 27th National Economic Summit held in Abuja yesterday.
He insisted that the Federal Government cannot commence its plans to make deductions from the federation account.
The Federal Government plans to begin deduction from the federation account for payment of $418 million private consultants who took part in the Paris Club Refund.
This move by the Federal Government is projected to affect the recurrent expenditure of at least 33 states and they may not be able to pay the salaries of their workers.
For this reason, the chairman of the Nigerian Governors’ Forum says the state governors are not in support of the decision.
According to him, a situation where the Federal Government makes arbitrary deductions without the input of state governors is wrong.
He said state governors have agreed not to collect any allocation from the Federation Allocation Account (FAAC) until the issues are resolved.
“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,” Governor Fayemi said.
Recall that the Nigeria Governors’ Forum (NGF) and the Minority Caucus of the House of Representatives had the Federal Government over plans to pay judgment debt of $418million to consultants who facilitated its London and Paris Clubs’ debt relief.
While the NGF queried Finance Minister, Zainab Ahmed, for issuing promissory notes in favour of judgment creditors relating to Paris and London Club refunds, despite pending court cases, the minority caucus of the House of Representatives cautioned against the reported approval of the payment of $418million Paris Club judgement debt by President Muhammadu Buhari.
NGF had in a letter dated August 30 and addressed to the minister, through their lawyer, Mr Femi Falana, SAN, said the minister ought to have stayed the execution of judgment “connected with payments of legal and consultancy fees arising from London Club Debt Buy Back and London Club Debt Exit Payment, which is the fulcrum of the judgment of the Federal High Court, Abuja in suit No: FHC/ABJ/CS/130/13 – Linas International Limited & ORS V. the Federal Government of NIGERIA & ORS.
The letter read partly: “Your office was duly served with court processes seeking for stay of execution of, and/or injunction restraining you and others from giving effect to, activating, enforcing and/or further enforcing the judgments of the trial courts pending the determination of our appeals.”
