Paris Club Refund: FG Orders Stoppage of Deductions, Directs Refund to States

•Kwara’s Abdulrasaq emerges new NGF chair, Makinde is deputy 

•Gombe governor leads northern colleagues

Chuks Okocha in Abuja

The federal government, yesterday, ordered the immediate stoppage of further deductions from the federation account over the Paris Club Funds and immediately directed a refund to the states, the deductions so far made.

In another development, the Nigeria Governors’ Forum (NGF), has elected the Kwara State Governor, AbdulRahman AbdulRazaq, as its new chairman for the next four years.

At the same time, the Oyo State Governor, Seyi Makinde, was elected the vice chairman of the governors’ forum.

Also, the Gombe State Governor, Inuwa Yahaya, has been elected the new Chairman of the Northern Governors’ Forum, ahead of the next dispensation kicking off May 29, 2023.

In a communiqué at the end of the governors’ meeting released in the early hours of yesterday, outgoing chairman of the NGF, Aminu Waziri Tambuwal said the governors “were briefed by the Chairman of the Forum that the Minister of Finance, has granted the request of the Forum to immediately stop further deductions from the accounts of States to meet Local Government Councils London Paris Club obligations and the monies so far deducted paid back to the states.”

In 2005, the Paris Club in Nigeria, justified the federal government’s economic reforms as far-reaching and focused and therefore cancelled 60 per cent of the country’s $30bn debt.

Between 1995 and 2002, before the debt was written off, the federal government had agreements with state governments to deduct certain amounts from their federal allocation to service the debts.

Following a final agreement with the club in October 2005, some states that had been over-charged in the debt servicing arrangement, applied for a refund.

However, in December 2016, the federal government agreed to refund the states but in three tranches. The first and second tranches had been released.

But controversy arose over money that would be paid to the consultants that facilitated the fund.

The controversies led to series of legal actions, accusations and counter-accusations that the Minister  of Justice and Attorney General of the federation, Abubakar Malami, supported the consultants against the governors.

As the controversies raged,  the NGF opted for a legal solution to the dispute over the federal government’s planned payment of the $418 million Paris Club Refund fee to consultants.

The governors, in a communique after one of their meetings, said, “Regarding the $418 million Paris Club Refund and promissory notes issued to consultants by the Federal Ministry of Finance and the Debt Management Office (DMO), the forum remains resolute in exploring all legal channels available to it in ensuring that resources belonging to states are not unjustly or illegally paid to a few in the guise of consultancies.”

The communiqué also stated that Governor AbdulRazaq has emerged Chairman of NGF for the new regime, while Makinde emerged his deputy.

He emerged by consensus at a closed door meeting of the governors held in Abuja, Tuesday night.

The Kwara governor is to succeed Tambuwal, who has been acting chairman since last year. This was contained in  statement by Tambawul.

Immediate past governor of Ekiti State, Dr Kayode Fayemi, was the substantive chairman of the NGF until his second term in office as governor ended last year.

Tambuwal, who was Fayemi’s deputy then was named as acting Chairman of the Forum.

Meanwhile, Yahaya has been elected as the new chairman of the Northern Governors Forum.

Yahaya, who was first elected governor in 2019, won his re-election bid in the March 182023 governorship elections.

He will be taking over from the outgoing chairman of the forum and governor of Plateau State, Simon Lalong.