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Tag: Paris Club refunds

  • Paris Club refunds: Court fails to include states’ AGs in FG’s suit to block $418m debt

    Paris Club refunds: Court fails to include states’ AGs in FG’s suit to block $418m debt

    A Federal High Court in Abuja has rejected an application filed by the Attorneys General of the 36 states, seeking to be made parties in a suit in which the Federal Government seeks to block the redemption of the promissory notes issued to some consultants/contractors in relation to the Paris Club refunds dispute.

    The consultants/contractors, who claimed to have been engaged by the Nigeria Governors’ Forum (NGF) and the Association of Local Governments of Nigeria (ALGON) to retrieve their shares of the Paris Club refunds, got judgments against the states, which put the debt owed them at about $418million.

    In a ruling on Tuesday, Justice Inyang Ekwo held that the states’ Attorneys General were not necessary parties to the suit.

    Justice Ekwo, who faulted the application they filed for being defective, held that the suit could be effectively determined by the court without the states’ Attorneys General being made parties.

    The judge adjourned till October 22 for the hearing of the preliminary objection raised by the defendants against the complete CE of the suit.

    The states’ AGs had argued that, being representatives of the various states, whose funds would be affected by the promissory notes, they ought to be heard in the case.

    The Fed Govt, through the office of the Attorney General of the Federation (AGF) had, while initiating the suit last year, faulted the procedure for the issuance of the 62 promissory notes in 2021 and urged the court to void the notes already issued.

    The plaintiffs also want the court to, among others, set aside all the promissory notes and issue an order of perpetual injunction, restraining the defendants and their agents “from exercising any proprietary rights” over the said promissory notes.

    Plaintiffs in the suit, marked:  FHC/ABJ/CS/896/2023 are the Federal Government of Nigeria ((FGN) the AGF, the Minister of Finance, Budget and National Planning, and the Accountant General of the Federation.

    Listed as defendants are FSDH Merchant Bank Limited, Ned Munir Nwoko, Gregory Nangor Lar, Riok Nigeria Ltd, Prince Orji Nwafor Orizu, Olaitan Bello, Dr. Ted Iseghohi Edwards, Panic Alert Security System Limited.

    The 62 promissory notes, valued at $418,953,668 were issued to the defendants on September 27, 2021, by the Debt Management Office (DMO), following judgments and orders of mandamus obtained against the Fed Govt and the Minister of Finance.

    The plaintiffs are contending among others, that the promissory notes are invalid, having been wrongly issued in violation of relevant laws.

    They added that, although the promissory notes were executed by the then Minister of Finance, Budget and National Planning and the Director General of the DMO, the notes were not signed as required.

    The plaintiffs argued that “the promissory notes in issue were wrongly and unlawfully changed on the assets and revenues of the federation instead of the assets and revenues of the states and Local Governments, who incurred the applicable loans/debts”.

    A senior official of the Federal Ministry of Justice, Mr. Oyinlade Koleosho stated, in a supporting affidavit, that the promissory notes were wrongly and invalidly issued against the assets of the federation.

    He stated that Sections 314 and 317 of the Constitution have separated the assets of a state or Local Government Council from the assets of the Federation or the Federal Government of Nigeria.

    Koleosho added that the 62 promissory notes issued to the defendants are invalid because they were charged on the assets of the Fed Govt, which is not indebted to any of the defendants (contractors/consultants).

    The plaintiffs also stated that the Federal Government of Nigeria did not engage any of the defendants, adding that there is no valid consideration for the promissory notes issued to them (defendants).

    “The debts upon which the promissory notes were issued were not incurred by the Federal Government of Nigeria or the Federation.

    “The promissory notes charged against the assets of the Federal Government of Nigeria are only issued in respect of loans taken by it and not by the State Government or Local Government Councils.

    “The promissory notes of the Federal Government of Nigeria can only be issued to offset Federal Government-owned debts,” Koleosho said.

    According to court documents, FSDH Merchant Bank Limited was issued 10 promissory notes for a total value of $67,925,661.00, at the rate of $6,499,561.00 per note (allegedly for the benefit of Nwoko)

    Gregory Nangor Lar, who is described as Nwoko’s agent, was issued two promissory notes “for the account/ benefit of the 2nd defendant (Nwoko) for the total value of $732,511.00 at the rate of $366,256.00 per note.

    Riok Nigeria Ltd was issued 10 Federal Government of Nigeria promissory notes issued for a total value of $142,028, 941.00, at the rate of $14,202,895.00 per note.

    Read Also: Paris Club refunds: Court fixes judgment for March 25

    Prince Orji Nwafor Orizu was issued 10 promissory notes for a total value of $1,219,440.00 at the rate of $121,944.00 per promissory note.

    Barr. Olaitan Bello is said to have been issued eight promissory notes for a total value of $215,195.00 at the $21,524.00 per promissory note.

    Dr. Ted Iseghohi Edwards is said to have got 10 promissory notes for the value of $159,000,000.00, at the rate of $15,900,000.00 per note.

    Panic Alert Security System Limited was also issued 10 promissory notes for the value of $47,831,920.00 the total value of the 10 notes, with a value of $4,783,192.00 per note.

  • FG to disburse Paris Club Refund to States in tranches

    The Federal Government Tuesday said the payment of the approved amount from Paris Club refunds will be made in phased tranches to the States.

    For state governments to access the final approval of US$2.689 billion refund, the federal government gave the following conditions:

    Salary and staff related arrears must be paid as a priority; Commitment to the commencement of the repayment of Budget Support Loans granted in 2016, to be made by all States; Clearing of amounts due to the Presidential Fertiliser Initiative, Commitment to clear matching grants from the Universal Basic Education Commission (UBEC) where some States have available funds which could be used to improve primary education and learning outcomes.

    Read Also:Fayemi faults Fayose’s claim on Paris Club refund denial

    A statement from the Federal Ministry of Finance on Tuesday provided some clarifications on the Paris Club Refund approved for the 36 States of the Federation.

    According to the statement signed by Hassan Dodo, Director (Information) “the issue of Paris Club loan over-deduction had been a long standing dispute between the Federal Government and the State Governments which dated back to the period of 1995 to 2002.”

    In response to the dispute, President Muhammadu Buhari he said “directed that the claims of over-deduction should be formally and individually reconciled by the Debt Management Office (DMO). This reconciliation commenced in November 2016.”

    As an interim measure to alleviate the financial challenges of the States during the 2016 recession, President Buhari, Dodo noted, “had approved that fifty percent (50%) of the amounts claimed by States be paid to enable the States clear salary and pension arrears.”

    Dodo said this was released between 1st December, 2016 and 29th September, 2017. This refund was part of the Government’s fiscal stimulus to ensure the financial health of Sub-National Governments.

    The DMO led the reconciliation process under the supervision of the Federal Ministry of Finance.

  • FG set to disburse fresh Paris Club refunds to states

    FG set to disburse fresh Paris Club refunds to states

    State governments will in no distant future receive the third tranche of the Paris Club loan refunds.

    The National Economic Council (NEC) is expected to give the go ahead for the release of the refunds at its next meeting, The Nation gathered yesterday.

    The exact day the meeting will come up was unknown last night.

    Much of the money, like the earlier refunds, is expected to be spent in settling accumulated salaries and pensions/gratuities.

    NEC is headed by the Vice President and has state governors, the Central Bank Governor and other key economic players as members.

    Ahead of the meeting, the Nigeria Labour Congress (NLC) wants President Muhammadu Buhari to go beyond lamenting the plight of workers in the various states following the non-payment of salaries in some of the states despite the release of the two earlier Paris Club loan refunds.

    NLC President, Ayuba Waba, said Buhari should order the law enforcement agencies to probe the use to which the governors put the funds.

    Buhari, meeting with a delegation of the governors earlier in the week, wondered how some of them were able to sleep at a time they could not pay their workers who end up unable to meet their financial obligations to their families.

    The governors’ delegation at the meeting asked for the release of the balance of the refunds.

    Governor Mohammed Abubakar of Bauchi State said on Wednesday that the fact that the governors met Buhari to ask for the money did not mean they were begging for anything.

    “Don’t forget, this is money that belongs to us,” he told reporters in Abuja. “We are not begging for anything, but demanding what belongs to us, and that it should be paid to us.”

    Sources told The Nation yesterday that the release of the next tranche of the refunds is likely to come with conditions to ensure that workers’ plight is reduced.

    One source said the states “have to show commitment to using the funds for the purposes they are meant.”

    There are allegations that some of the state governors diverted the money to other areas.

    The result is that some states are still owing salaries and pensions/gratuities.

    Speaking to The Nation in Abuja on the issue, NLC President, Ayuba Wabba, said the states should give account of how they disbursed the previous releases made to them.

    Wabba said the non-payment of salaries by some governors was not due to lack of funds but an indication of lack of good governance, accountability and transparency.

    He said: “It is unfortunate that despite the Paris Club refunds given to the states, some of them have not justified the utilization of the funds.

    “Before the last tranche was given, there was a template and a commitment by the governors to utilise the money to try and defray these liabilities.

    “Going forward, I think the Federal Ministry of Finance should look at whether those commitments that were made have been fulfilled.

    “Part of the way forward also is to try and institute good governance, transparency and accountability at all levels.

    “Once we have that, those problems can be addressed because it has proven very clearly that the non-payment of salaries, pension and liabilities of workers is not specifically about lack of resources; it is also about priority and commitment to doing what is obvious.

    “From our analogy, we have seen states with little resources paying as and when due and they don’t have problems. Yet, there are states that are receiving as much as possible and have liabilities.

    “You can situate this within the context of what is happening in the country where our political elites spends fortunes on birthday alone and yet cannot lay salaries in their states.

    “Therefore, I think that despite being a different tier of government, there is a way we can try and get those records because it is about transparency, accountability and getting your priorities right.

    “We should try and do a process of verification to know whether or not, the commitment that was made earlier has been followed to the letter, and that should be the basis on which those funds can be released.

    “Although strictly speaking, when you look at the present situation, there is the tendency for them to argue that it is their money and we must give them their money.

    “But in the context of good governance, the Presidency has an overall responsibility to uphold the primary purpose of governance which is the security and welfare of the people.

    “It is a constitutional provision that the primary purpose of governance is security and welfare of the people, and once you cannot take care of the security and welfare of the people, there will be social instability and a lot of other things can follow, such as extreme poverty which we are now trying to address.

    However, Odilim Enwegbara, a development economist and financial expert has a different view of the situation.

    He said:” the states are the federating units so they are quasi-independent of the federal government.

    “For this reason, they are never accountable to the federal government or to federal lawmakers, but rather to their houses of assembly.”

    Continuing, he said: “Since what they’re requesting from the president isn’t a federal loan, I can’t understand why they should have the federal government dictate to them how they should spend their money.

    “Let their own state lawmakers with such mandate to scrutinise them be the ones coming up with how the governors should and on what the money should be spent on.”

  • Senate to review release of Paris Club refunds to governors

    Senate to review release of Paris Club refunds to governors

    The Senate will next week consider how the Paris Club refunds doled out to state governments was approved.

    President Muhammadu Buhari gave part of the Paris Club refunds to state governors as bail out funds to assist them to off set mounting salary arrears.

    The Senate resolution followed observation by Senator Samuel Anyanwu that the upper chamber should look into the legality of the bail out funds given to governors by President Buhari.

    Anyanwu (Imo East) sought to know who gave approval for the distribution of the Paris Club refunds since the National Assembly was not consulted before the disbursement of the funds to state governors.

    Anyanwu said, “I am worried about the Paris club refunds. Governors are asking for more funds. Where is this money coming from. The Senate has not given any approval for the disbursement of any such funds. Who gave approval for the bail out funds and where is the money for.

    “I heard the President scolding them the other day. The President was asking them how they sleep at night even when they do not pay salaries. They have received billions of naira. I feel worried. Even the Nigerian Labour Congress (NLC) has told the President to stop giving bail out funds to governors.

    “If you look at front page of newspaper, you will see the issue there. This is the problem. If my colleagues will allow me, I want to bring this as a motion at our next legislative day. I so submit.”

    Senate President, Abubakar Bukola Saraki, sought the leave of the Senate to authorize that a proper motion be brought on the issue.

    Saraki said, “Senator Samuel Anyanwu has spoken. Is it the wish of our colleagues that this motion be brought at another legislative day.”

    The approval was unanimous.

    President Buhari, in 2015, few weeks after he assumed office, approved bailout funds to states to settle salary arrears, without any recourse to the National Assembly.

    The 1999 Constitution, (as amended) noted in Section 80 (4) “No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.”

    In late 2016 and early 2017, President Buhari approved the disbursement of N760.17 billion in two tranches of N243.79 billion each to the 36 state governments and the Federal Capital Territory.

    The funds were also meant to offset backlog of salaries of state civil servants.

    Only last Tuesday, governors once again met with President Buhari, to demand for the release of the outstanding Paris club refund by November, to enable them include it in their 2018 budget appropriation.

    Read Also: Governors demand payment of Paris club refund balance

     

  • ‘Pay Paris Club refunds to us’

    ‘Pay Paris Club refunds to us’

    Civil servants in Ekiti State have called on the Federal Government to pay arrears of salaries from the next tranche of Paris Club refund directly into their accounts.

    The workers under the aegis of the Enlightened Workers Forum (EWF) in a statement yesterday by the Coordinator, Mike Bamidele, said the demand was hinged on the fact that they are “hungry”.

    They said: “Let the world be told that Ekiti workers are hungry and contrary to the impression being created by Governor Ayo Fayose that all is well and if nothing urgent is done, we might all die of hunger.

    “Already for the first time in the history of Ekiti, a senior civil servant committed suicide. Pensioners are dying in large numbers.

    “Finally, we are requesting the Ministry of Finance to pay the salaries and pension arrears directly into our accounts.”

     

  • Paris Club refunds: Why Buhari conceded to states – Adeosun

    Paris Club refunds: Why Buhari conceded to states – Adeosun

    The Minister of Finance, Mrs. Kemi Adeosun, on Monday said President Muhammadu Buhari conceded London-Paris Club loan refunds to states because of the plight of salary earners and pensioners and the need to stimulate the economy.

    She also said the Federal Government has consistently complied with all extant rules and regulations in the disbursement of the Paris Club refunds to state governments.

    She said the President gave an express Anticipatory Approval for the release of up to 50 per cent of each state claim pending final reconciliation.

    Adeosun said her ministry will soon undertake independent monitoring of compliance with the terms and conditions of funds released.

    The minister, who made the clarifications in a statement issued by her Special Assistant on Media, Mr. Festus Akanbi, said further releases to states will not be automatic.

    She said the overriding consideration for any further releases will be the current and projected cash flows of the Federation as well as the outcome of the independent monitoring of the compliance with terms and conditions attached to the previous releases.

    The statement said: “The Minister of Finance has deemed it necessary to address the issue of Paris Club Refunds and wishes to assure the public that the Federal Government has consistently complied with all extant rules and regulations in the disbursement of the Paris Club refunds to state governments.

    “The Federal Government’s disbursement process is transparent and targeted at the attainment of specific economic objectives. The inability of some sub-national governments to meet salary and other obligations was considered inconsonant with the Federal Government’s economic stimulus programme. Claims with regard to over deductions had been made to the Federal Government, consistently since 2005.

    “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.”

     

  • Bayelsa to use Paris Club to pay council workers’ salaries

    The Bayelsa Government has directed the immediate release of N1.3 billion share of the Paris Club refund to its eight local governments for full payment of their workers’ salaries.

    The the money, which is the first tranche of the refunds, was withheld pending staff verification to rid the councils of ghost workers.

    President Muhammadu Buhari on Thursday authorised the release of the second tranche of the refunds to states that complied with the terms which included disbursement of local government share.

    Public servants in the local government system were placed on half salaries since May 2016, due to paucity of funds, while their backlog of arrears ranged from six months to 12 months across the local government areas.

    The amount, out of the N14.5 billion received as the state share of the refund from the Federal Government, was disbursed in December 2016.

    Governor Seriake Dickson had told stakeholders during an emergency meeting in Yenagoa that the decision to withhold the councils’ share was due to the discovery of fraud in their payroll.

    The state Commissioner for Local Government Affairs, Mr. Aghata Goma, confirmed the release of the fund on Friday and advised local government chairmen in the state to deploy 50 per cent of the money to pay full salary to workers.

    “The governor has just approved the release of the local government share of the Paris Club loan refunds, and it will improve the resource base of the councils to meet their salary obligations to their workforce,” he said.

    NAN