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NGF says payment illegal
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No earlier objection from states, LGAs – FG
The federal government and the Nigerian Governors Forum (NGF) have drawn a fresh battle line over the deduction of $418 million (about N172 billion) from the accounts of states and local governments to pay contractors as ‘consultancy fees’ for the Paris Club refunds to Nigeria.
The governors described the planned deduction as “illegal” while the federal government through the office of the Attorney General of the Federation and Minister of Justice said there was an agreement to that effect and wondered why the governors wanted to renege.
If the payment scales through, Daily Trust reports that at least 33 states might not be able to pay salaries.
Most of the states depend on funds from the federation coffers, which are shared every month by the Federal Account Allocation Committee (FAAC).
In October, the governors engaged the Federal Ministry of Finance, Budget and National Planning, after the latter said the payment process had begun. The governors refused to share the September income insisting the federal government must give a transparent explanation on the Paris Club deduction status.
The governors at the moment are also backing the removal of subsidy so they could have the over N100bn being deducted from the FAAC remittances to subsidise petrol by the NNPC Limited every month.
Govs not yielding to FGs moves
In what seems like a fresh struggle against the federal government, the governors’ forum in a statement issued by its Head of Media and Public Affairs, Abdulrazaque Bello-Barkindo, on Monday, said the move to pay $68.6m consultancy fees to LINTAS and NED Nwoko over the Paris Club refunds part of the entire payment was a source of worry.
“Was the AGF not concerned that several contractors are laying claim to legal fees for the same Paris Club Refund? They asked.
“Was it lost on the AGF on the detailed procedure available under the law on how legal fees can be claimed in deserving cases?
“LINTAS and NED Nwoko in this scheme are walking away with US$68,658,193.83 state funds allegedly for legal consultancy services. Is the AGF not aware that the work alleged to have been done by him was already contained in a FAAC Reconciliation Committee Report constituted in 2005 submitted in 2007 with recommendations on how states and LGAs should be refunded the overcharges from the Paris Club Refunds?”
Earlier on Friday, the AGF office, which is being accused by the governors forum of pushing for the payments, issued a statement through the minister’s special assistant on media and public relations, Dr Umar Jibrilu Gwandu lending its support for the payment to the contractors saying it was legal.
“By various letters addressed to the Honourable Attorney General of the Federation and Honourable Minister of Finance, both NGF and ALGON expressed no objection and actually recommended the same set of consultants for payment.
“Indeed, the judgement debts were much higher than the above figure, but these officers ensured that the consultants granted a consistent concessional offer,” the statement said.
The statement from the AGF office said the governors had previously consented to the payment.
Also, the NGF in the latest statement confirmed that $86.5m and N19.4 billion were paid in 2016 and $100m paid in 2018 to the contractors with the concurrence of the governors.
But questioning the development yesterday, the governors forum said: “That does not detract from the fact that they were payments wrongly made, which ought not to have been made even if they were products of consent judgments. States can still go after the contractors to recover the funds wrongly made.”
The NGF further said the AGF office authorised a ‘strange’ payment of $47.8m to PANIC Alert Security Systems Ltd/George Uboh for allegedly reviewing a 16-page judgment for the then factional NGF.
“Can the Office of the HAGF point to any consent judgment awarding that sum to PANIC Alert? Did the NGF’s letter of 20th January 2020 relied upon by the HAGF ever recommend the payment of any sum?” the forum queried.
NGF said that the entire Paris Club refund consultancy fee payment had reached the Supreme Court and that the AGF office ought to either appeal against this or maintain the status quo instead of hastening to have the contractors paid and violating the court process.
“The AGF may need to explain to Nigerians why these particular judgment debts are given unusual attention and priority and processed with supersonic speed over and above all others; some of which preceded these so-called judgments and have been pending for settlement by the AGF for several years.”
States may not pay salaries over deductions
Daily Trust recently reported that at least 33 states of the federation would find it difficult to pay salaries with the decision of the federal government to debit them to pay consultants.
Also, BudgIT, a civic group committed to government financial transparency, in its report titled ‘State of States 2019’, said only three Nigerian state governments (Lagos, Rivers and Akwa Ibom) could finance their recurrent expenditure without allocation from the federal government.
Background of the Paris Club payments
In 2006, the federal government paid $12bn to get an $18bn debt write-off by the Paris Club of international creditors.
However, because the payment was made directly from the revenue accruing to the entire federation, states and LGAs that did not owe the Paris Club asked the federal government for a refund.
Some consultants then surfaced along the line to claim a percentage of the refunds as payment for their purported services to the states and LGAs.
Some contractors also claimed they were asked to execute projects across the country by the Association of Local Governments of Nigeria (ALGON).
Questions were however asked on why states would need consultants to negotiate with the federal government over the refund, while the projects said to have been awarded by ALGON turned out to be mostly non-existent. The governors then asked for a forensic audit.
While the contractors and consultants went to court, the Attorney General, Abubakar Malami, negotiated an out-of-court settlement with them and agreed to pay $418 million as judgment debt.
Meanwhile, despite opposition by the governors and activists, President Buhari went ahead to approve the payments.
