The recent warning by state governments to the Federal Government not to deduct any money accruing to them and all local governments as liquidation of the alleged $418 million London/Paris Club loan refund judgment debt shows that the contentious issues on the matter have not been resolved. The governors’ stand in their joint letter dated April 4, was in response to a letter dated November 11, 2021, from the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, in which she stated government’s readiness to commence the deductions for the liquidation of the said debt.

Last month, the Attorneys-General of the 36 states appealed a judgment that struck out a suit filed in a Federal High Court, Abuja, seeking to restrain the federal government from effecting the planned deduction from states’ funds over the judgement debt fee. The governors had sought to restrain President Muhammadu Buhari and others from giving effect to such deduction. The body of Attorneys-General, who entered appearance for the governors had averred that the governors were not parties to any suit on the London/Paris Club refund, and therefore, were not liable to any person or entity in any judgment debt being relied on by the federal government.

Last year, the 36 governors under the aegis of Nigeria Governors’ Forum (NGF) warned that the alleged $418 million Paris Club Refund, posed obstacles to the disbursement of Federal Allocations to the three tiers of government, and thereby put most of the states in a financial tightrope.  It is unfortunate that almost one year since the $418million refund saga resurfaced, no resolution of the dispute is in sight. The controversy over the $418million refund is principally centred on the amount allegedly being owed to the consultants for services reportedly rendered during negotiations for the refund. The NGF is strongly opposed to the amount purportedly owed to the consultants. It accused the Attorney-General of the Federation (AGF) and Minister of Justice, Abubukar Malami (SAN) of having more than a passing interest in the contentious refund request by the consultants.                                                              

Consequently, the NGF has condemned plans by the Federal Government to deduct $418million from the Federation Account to repay the creditors. The state governors have described federal government’s move as unlawful and contrary to public policy and morality. Both camps have stated their positions on the matter.  Available documents have shown that the present discord can be traced to 2013, when the Goodluck Jonathan administration reached an agreement with the NGF and the Association of Local Government of Nigeria (ALGON) to engage certain consultants for the purpose of recovering certain amount of money relating to the Paris Club refund. The AGF says the federal government is relying on that document, in which the consultants were said to have delivered on the agreement reached. According to Malami, the consultants were not paid for the services they claimed to have rendered on account of which they approached the judicial system for the determination of their fees.                                    

The AGF and Minister of Justice also claimed that, “on account of that, there was a consent judgment of N3.2billion by the court in 2013,” and based on that, the states were committed to pay, and actually did make part-payment between 2016 and 2017. That consent judgment, according to him, “gave rise to the liability in contention.” The point of interest, he further argued, “is that the Governors’ Forum and ALGON met the federal government and conceded that payment should be deducted from their allocation and then, should be effected to the consultants.” He likened the present attempt by the governors to void their liability to “seeking to shut the barn door after the horse had bolted,” adding that the anti-graft agency, the Economic and Financial Crimes Commission (EFCC) and the State Security Service were called to verify all the claims by the consultants, and they confirmed them to be authentic.                              

But the aggrieved state governors have denied all the claims made by the AGF, and have further accused him of bias and representing private interests, and being in haste to effect payment to the consultants. They argued that the AGF should have remained neutral and protect public resources until all litigations on the matter are resolved. According to them, there is a subsisting Federal High Court order that restrained the Federal Government from deducting $418million from the bank accounts of the 36 states of the federation. Besides, the NGF maintains that it did not at any time provide any undertaking or indemnity to the federal government to act on its behalf as represented by the AGF and Minister of Justice.

Considering that the judgment debt is so huge, we urge all parties involved in the matter to embrace dialogue in resolving it. The AGF as the Chief Law Officer of the Federation should be diligent in advising the government in overall public interest.

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Source: news