$418m Deductions Suspended As FG, States Meet For FAAC Today

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.

Report indicated that 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 Nigerian Government had already issued promissory notes on the consultants’ pay.

The Ekiti State Commissioner for Finance, Akin Oyebode, confirmed in an interview with The PUNCH that the issue of deductions had been resolved.

The commissioner, who did not give details of the resolution, also confirmed that the FAAC would either meet on Wednesday or Thursday (today).

He also reiterated the demand of the states for the separation of the Office of the Accountant-General of the Federation from the Office of the Accountant-General of the Federal Government.

Last Friday’s 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 Nigerian Government had negotiated an out-of-court settlement with the contractors and $418m was agreed on as the judgement debt.

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

The Chairman of the Forum of Commissioners of Finance and Benue State Commissioner for Finance, David Olofu, had told Punch on Monday that the sharing of the October revenue by the three tiers of government was suspended last Friday because of the deductions.

A top member of FAAC, who confided in the medium on Wednesday, said, “Deductions will not be done until the conclusion of the court cases, but I don’t know what will happen to the October allocation on which deductions had been made.”

Oyebode also told one of our correspondents on Wednesday that the issue of deductions, which led to the delay in the monthly allocation to states from the Federation Account, had been resolved.

The Ekiti finance commissioner said, “The issue has been resolved. We (Federation Account Allocation Committee) expect to meet today (Wednesday) to adopt the communiqué. I believe that the meeting will hold today or latest tomorrow (Thursday).”

Oyebode, who declined comments on the content of the communiqué, said the allocation for October would be released.

He stated, “It (allocation) will be released. It was not withheld. The issue had to do with deductions, which were made on the accounts of the states and local governments. Our position, which has been clearly stated by the Chairman of the Forum of Finance Commissioners, is that we believe that those deductions are being challenged and should not even start unless the claims are verified.

“Also, if we are a federation and we are equal partners, we don’t believe that we should just come to a meeting and see deductions on our statement that were not previously discussed and agreed on. That is the principle of federation that we are upholding and defending. It is not an argument per se. It is just that it is a principle that the federating units should be upheld at all times.”

He added that an issue of concern was the need to have separate accountants-general for the federation and the Federal Government, noting, “The Office of the Accountant-General of the Federation is not the same as the Office of the Accountant-General of the Federal Government.

“We have argued that the offices should be separated. There should be an accountant-general for the Federal Government and an accountant-general for the federation, and not the present situation where the accountant-general of the federation is only responsible to the Minister of Finance.”

The commissioner gave an assurance that Ekiti State would pay October salaries to workers as scheduled, saying, “We will pay salaries. What is important is paying salaries.”