FG clarifies Paris Club repayment plan to States


The Director of Information, Federal Ministry of Finance, Hassan Dodo has on Tuesday, in Abuja, provided some clarifications on the Paris Club Refund recently approved for the 36 States of the Federation.

The Paris Club loan deduction issue has been a long standing dispute between the Federal Government and the State Governments, particularly between 1995 to 2002.

The dispute however receives the attention of President Muhammadu Buhari who directed that the claims of over-deduction should be formally and individually reconciled by the Debt Management Office (DMO).

Meanwhile, as a temporary measure to alleviate the financial challenges of the States during the 2016 recession, the President had approved that fifty percent (50%) of the amounts claimed by States be paid to enable them clear salary and pension arrears.

The refund which was part of the Government’s fiscal stimulus that ensured the financial health of Sub-National Governments, was released between 1st December, 2016 and 29th September, 2017.

The Debt Management Office ( DMO) in a reconciliation process under the supervision of the Federal Ministry of Finance, has announced the final approval of US$2.689 billion.

As stated by DMO, the disbursement will be subject to the fact that salary and staff related arrears must be paid as a priority and commitment to the commencement of the repayment of Budget Support Loans granted in 2016 must be made by all States clearing of amounts due to the Presidential Fertiliser Initiative.

The release also stated that there must be commitment to clear matching grants from the Universal Basic Education Commission (UBEC) where some States have available funds which could be used to improve primary education and learning outcomes.

DMO finally revealed that payment of the approved amount is to be made in phased tranches to the States.