Everything about the Paris Club Refund seems very shadowy. So far, the Federal Ministry of Finance has shielded Nigerians from detailed information about the money it had shared to states as refund of excess deductions from their statutory allocations. And the more questions Nigerians ask, the cloudier the details get. No state governor is even ready to disclose how the amounts credited to their states were arrived at. That raises a lot of suspicion about the money.
Nigerians want to know how the deductions were initially made. They want to know at what time the Paris Club realised that there were excess deductions. They want to know when their government realised that the deductions were in excess. They would like to know who supervised the deductions. They want to know how much exactly was over-drawn and how much, in all, including interest is due to Nigeria. Information in this regard is not handy; and there is suspicion that this is deliberate to keep prying eyes of the Nigerian away from the details.
But we are faced with a refund issue. Finance Minister, Kemi Adeosun, had disclosed that President Muhammadu Buhari, in November 2016, gave approval that a percentage of the total amount due the states as refunds, though not finally calculated, be released to the states to enable the payment of salaries. For this reason, some N522.7billion was shared in December 2016 among the states and FCT. Second tranche of the refund amounting to N243.7billion was also released to the states in June 2017.
Adeosun had clarified saying: “The Debt Management Office (DMO) initially requested for a period of 22 months to complete the reconciliation and facilitate disbursement. However, President Muhammadu Buhari, considering the plight of salary earners and pensioners and the need to stimulate the economy, directed that the exercise be completed within 12 months.
“In addition, Mr. President gave an express anticipatory approval for the release of up to 50% of the claim of each state, pending final reconciliation. That reconciliation is undertaken by the DMO, Office of the Accountant General of the Federation (OAGF) and the relevant State Governments”.
She also disclosed that “at the National Economic Council meeting on Thursday March 16, 2017, President Muhammadu Buhari instructed the Minister of Finance and Central Bank Governor to commence the process of resolving the balance of the approved amount.”
Recall that when the issue of how the refunds were managed by the governors was first raised, and allegations of non-payment of salaries and pensions were made despite release of the refunds, some of the governors defended their actions by saying that part of the funds were also used in paying consultants engaged to work out what would accrue to the states.
Consultants? But the Finance minister had said “reconciliation is undertaken by the DMO, Office of the Accountant General of the Federation (OAGF) and the relevant State Governments”. State governments have auditors and accountants and finance commissioners. So, why consultants?
The consultant, Mauritz Walton Nigeria Ltd, had approached a High Court of the Federal Capital Territory with an ex-parte application to freeze ‘Paris and London Debit Refund’ accounts of Abia, Cross River and Delta states with UBA Plc. In seeking the freeze order, the consultant disclosed that the states owe him as follows: Abia state -$11,325,000 and N1.72bn; Cross River state owes $8,050,000 and N1.2bn; while, Delta state government owes $27,274,135 and N3bn.
In the first tranche of refund made December 2016, Abia state received N10,631,324,520.96. In the second tranche in June 2017, it got N5,715,765,871.48. This amounted to a total of N16,347,090,392.44. Out of this, the consultant claims a debt of $11,325,500 (about N3,454,277,500.00) and another N1.72 billion amounting to a total of more than N5 billion.
Cross River state received N11,300,139,741.28 in the first tranche and N6,075,343,946.93 in the second tranche. This amounts to N17, 375, 483, 688.21. But the consultant claims $8,050,000 (about N2,455,250,000) and another N1.2 billion amounting to about N3.655 billion.
On its part, Delta state confirmed receipt of N14,500,000,000 from the first tranche and another N10,000,000,000.00 amounting to a total of N24.5 billion but allegedly owes the consultant the sum of $27,274,135 (about N8,318,611,175 and N3bn), which is about N11.3 billion. The outstanding to the credit of the consultant are without prejudice to what has already been paid to him by the states.
The above are based on claims made by the consultant against the states as made available to the high court of the FCT. No one would have known these details if there had not been a dispute that necessitated legal action. Based on the above, Gov. Okezie Ikpeazu was forced to explain that “a discussion on the Paris Club Refund to states in the country predates this administration. For those who don’t know, the Paris Club Refunds are monies legitimately belonging to states which were over deducted from the accounts of the states for the settlement of the debt owed by the country to the Paris Club of creditors under the scheme worked out by the Obasanjo administration.”
Speaking through his adviser on public communications, Onyebuchi Ememanka, the Abia governor further explained: “When the over deductions were sorted out, the Federal Government and the 36 states including the FCT agreed that the states should get these funds back and discussions on the modalities commenced. This was during the administration of former President Goodluck Jonathan. As a result of the complex nature of the transactions, the states then under the auspices of the Nigerian Governors Forum agreed to hire the services of financial advisors and consultants to assist in determining the exact amount due to each state under the refund scheme. Each state agreed with the consultants on the details of the contractual agreement and how much was to be paid as fees.
“Please note that all the 36 states then agreed to this. The refunds were never made by the last administration which left the entire scheme including the agreements with the consultants to lie in abeyance. It was the present government of President Buhari that now agreed to make the refunds and this naturally reactivated the interests of the consultants. Most of the Governors are new and were not part of the agreement with the consultants and they sought fresh details on the agreements. The reconciliation between the consultants and the states together with the Nigerian Governors Forum has been ongoing and some payments had been made to the consultants. This is public knowledge.”
