There were strong indications on Wednesday that the federal and state governments had agreed to the suspension of the deduction of $418m Paris Club refunds from states and local governments’ accounts pending the determination of court cases on the issue.

Following the agreement, which was reached between states’ officials and the Federal Ministry of Finance, the Federation Account Allocation Committee meeting, which ended in a deadlock last Friday, would now hold today (Thursday).

It was, however, not clear if the decision to suspend the deductions would affect the October revenue allocation, but it was gathered that the Federal Government had already issued promissory notes on the consultants’ pay.

Last Friday’ FAAC meeting ended in a deadlock as a disagreement arose between the federal and state governments when the committee was informed by the Ministry of Finance that the deductions for the $418m from the local governments’ allocation had commenced in order to pay the consultants for the work they did on the Paris Club refund.

The country had in 2006 paid $12bn to get a $18bn debt write-off by the Paris Club of international creditors.

States and local governments that did not owe the Paris Club later asked for a refund when they realised that the payment was made directly from the revenue accruing to the entire federation.

There were reports that some consultants, who claimed a percentage of the refunds as payment for services they said they rendered to the states and local governments, went to court to demand their pay.

The Federal Government had negotiated an out-of-court settlement with the contractors and $418m was agreed on as the judgment debt.

But the Nigeria Governors’ Forum, which opposed the payment, approached the court to stop the implementation of the controversial agreement.



Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: