$418M Paris Club Refund: Again, Govs Tackle FG Over Deductions

$418M Paris Club Refund: Again, Govs Tackle FG Over Deductions

By Charles Ebi and Mariam Sanni

All is not over as the lingering crisis trailing the resolve of the Federal Government to deduct the $418 million Paris Club refund from the Federation Account is yet to be laid to rest, as the 36 state governors under the aegis of Nigeria Governors’ Forum, NGF, have reiterated its opposition to the decision.

Reports have it that the meeting of Federation Account Allocation Committee, FAAC, to harmonise the stance of the parties came to a deadlock following the state governors’ opposition to the commencement of the deduction to pay private consultants for the Paris Club refund.

The move by the Federal Government is projected to affect the recurrent expenditure of at least 33 states that may not be able to pay the salaries of their workers.

According to the Nigeria Governors’ Forum ,NGF counsel; the Federal Government’s notice via a letter with Reference No. FMFBNP/SGOVS/DEDUCTION/PCL/11/2021, dated November 11, 2021, to commence deduction from allocations due to the states from the Federation Account for the liquidation of London/Paris Club refund-related judgement debts on behalf of the 36 states of the federation and the 774 local governments is unconstitutional.

According to the letter sighted by AljazirahNigeria, “The states of the federation were not parties to any contract or suits concerning the London/Paris Club refund, from where the said judgement debts arose. Consequently, the 36 states of the federation are not liable to any person or entity in any judgement debt”.

Chairman of the Governors’ Forum and Governor of Ekiti State, Kayode Fayemi criticised a situation where the Federal Government makes arbitrary deductions without the input of state governors, adding that they had agreed not to collect any allocation from the Federation Allocation Account, FAAC, until the issues were resolved.

“We are dealing with the issue. We would find a resolution to it. As far as states are concerned, they do not accept that funds belonging to federation account could just be arbitrarily deducted without the input of the states, and that’s why we are insisting that until this is clarified, we would rather leave the money in the pool until we have all agreed on the direction”, Fayemi said.

They maintained that the “deduction of the allocations due for the 36 states of the federation from the Federation Account to liquidate the London/Paris Loan refund-related judgement debts is the subject of an appeal filed by the 36 states of the federation at the Court of Appeal, Abuja”.

It would be recalled that an earlier approval of the President under the instrumentality of the Attorney-General of the Federation and Minister of Finance to pay the said sum to the contractors through the issuance of Promissory Notes had met stiff resistance by the 36 state governors who approached the court for a redress through their Attorneys-General. The matter is currently pending at the Court of Appeal in Abuja for hearing.

AljazirahNigeria recalls that Justice Inyang Ekwo of a Federal High Court sitting in Abuja had earlier refused to grant an injunctive order against the Federal Government over the bid to deduct $418million from the allocations of the 36 states government to fund their contractual obligations in the Paris club refund.

Justice Ekwo declined the request for an injunctive order made by the 36 state governors to stop the Federal Government from proceeding further deductions from their money from the Federation Account.

The judge dismissed the suit for lacking in merit, pointing out that the plaintiff had not shown enough proof to accord them the right to appear in a court to institute action.

“There was no express evidence to show that the State Governors consented to filing of the suit.

“The Office of the Attorney General of State was created under Section 195 of the 1999 Constitution, as amended.

“The AG of a State is appointed by a governor, which makes the AG an appointee, who is under the control of a governor.

“From the court’s findings, the plaintiff has no locus standi to file the suit, therefore there was no cause of action”, the judge ruled 

The court further noted that the contention of the plaintiff was weak because the Nigerian Governors Forum and the Association of Local Governments were parties in the suit.

The judge also stated that the action of the plaintiff amounted to an abuse of court process.

The governors through their counsel, Sunday Ameh, moved a motion praying the court to grant an injunctive order against the Federal Government, so as not to proceed with deduction of the $418million.

Attorneys-General of the 36 states had in a motion on notice is marked FHC/ABJ/CS/1313/2021, dated and filed on March 28, prayed Justice Ekwo to restrain the respondents from proceeding with its judgement delivered on March 25 pending the hearing and determination of the appeal at the appellant court.

The application was brought pursuant to Order 32 Rule 1 and Order 56 Rule 8 of the Federal High Court Civil Procedure Rules 2019; Sections 120 and 162 of the  1999 Constitution (as amended) and under the inherent jurisdiction of the court.

Recall that the state Attorneys General had sued President Muhammadu Buhari, Attorney-General of the Federation, AGF, Accountant-General of the Federation, Ministry of Finance and Central Bank of Nigeria, CBN.

Others are Debt Management Office, DMO, Federation Account Allocation Committee, FAAC, Incorporated Trustees of Association of Local Government of Nigeria, ALGON, Dr Chris Asoluka, Linas International Limited, among others.

According to the motion, 43 defendants are sued in the matter.

They prayed the court for an order of interim injunction restraining the Federal Government in carrying out its plans of disbursing the Paris Club fund to those the FG claimed provided legal services leading to the refund of the money to the country.


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NGFNigeria Governors’ ForumParis Club Refund