There is disquiet among governors
over a plan to pay some consultants $138 million (about N42.2b at the official
N306 to $1) of the $6.9 billion Paris-London Club loan refund.
Non-payment of salaries and pensions
is considered a breach of the agreement between the Presidency and the
governors.
The Presidency has released
N1,266.44 trillion to the 36 states in the past one and a half years. The cash
includes N713.70billion special intervention funds.
Some governors are displeased that
the Nigeria Governors Forum (NGF) plans to pay 2% of the $6.9billion refund to
consultants.
The 2% is $138,000,000
(N42.228billion at the official rate of N306 to $1).
According to a governor, who spoke
in confidence, NGF Chairman Abdulaziz Yari, who is also the governor of Zamfara
State, conveyed the agreement to pay 2% to some consultants in a July 29, 2016
letter to the Minister of Finance, Mrs Kemi Adeosun.
The letter reads: “Please recall
that the Nigeria Governors Forum had at its meeting of May 2016 appointed a
Consortium of Financial Consultants to reconcile and recover over-deductions
from the Paris and London Club loans due to states and local governments.
“Also, Mr. President in a meeting
with members of the Forum had graciously agreed to pay 50% of the monies due
and the balance of 50% paid after due and diligent reconciliation of the
accounts.
“At the last meeting of the Nigeria
Governors Forum held in July 2016, the Forum unanimously resolved to pay a fee
of 2% to the consultants as their professional fees for the services rendered.
“Pursuant to the Forum’s resolution
therefore, I am requesting that the payment of the consultant fees should be
deducted at source from each state’s entitlement and paid directly to the
account details of the consultants as attached with.
“Consequently, we crave the
indulgence of the Honourable Minister to effect the wishes of the governors
when implementing Mr. President’s directives.”
But the aggrieved governors said
they were not happy realising that “one or two governors” brought the lead
consultants after each state had engaged its own consultants. “Our colleagues
can also not be offering consultancy services to us through some proxies”, he
said, pleading not to be named because of “the sensitivity” of the matter.
The governor went on: “At the end of
it all, states are expected to part with N42.2billion to consultants who are
not primary sources of the loan records. We were shocked that out of the
N19billion consultancy/legal fees paid into the NGF accounts, most consultants
hired by states have not been paid a farthing.
“The bulk of the job of the
reconciliation of loan refunds is being done by officials and consultants or
financial advisers from each state, the Debt Management Office (DMO), the
Ministry of Finance, the Office of the Accountant-General of the Federation
(OAGF).
“Some of us will resist further
deductions from our loan refund. The N42.2billion is outrageous.”
Following protests by states against
over deductions for external debt service between 1995 and 2002, President
Muhammadu Buhari approved the release of N522.74 billion (first tranche) refund
to states pending reconciliation of records.
Each state was entitled to N14.5
billion or 25% of the amount claimed.
Mrs. Adeosun said the payment of the
claims would enable states to offset outstanding salaries and pension, which
had been “causing considerable hardship”.
Governors had sought for the refund
to states and local government areas at a meeting with President Buhari on May
24, last year.
The President directed that:
- a thorough reconciliation be carried out between the states and the Federal Government; and that
- 50% of the claims submitted by the states be released prior to completion of the reconciliation to support states, most of which are financially distressed.
Based on the intervention by the
President, the NGF, in a letter to the Presidency, said “the total refund claim
submitted by states was $6.9billion of which $2.6billion belongs to local
governments.”
The NGF, in the letter through Yari,
added that “the data was obtained from the Revenue Mobilisation Allocation and
Fiscal Commission (RMAFC).”
“The $2.6billion deducted from the
local governments is not disputable as the local governments have the
powers or capacity to take foreign loans for which the disputed
deductions relate to,” the letter said.
The Presidency released N522.74
billion (first tranche) to states.
The release of the cash triggered a
huge controversy, including payment of N19billion consultancy fees and
$86million into the accounts of the NGF.
The Economic and Financial Crimes
Commission (EFCC) is investigating the alleged diversion of N19billion of which
it has traced N3.5billion, allegedly to a consultant and some aides of the
Senate President, Dr Bukola Saraki.
The latest dimension is
non-remittance or “partial remittance” of the share of the 774 local government
areas by some governors.
It was learnt that some governors
hid under the Joint Account System to utilise local government refund for other
purposes.
Local governments are entitled to
$2.6billion of the refund. It is surprising that in some states, local
government employees are still being owed about six to 10 months salary arrears,
contrary to the spirit of the refund approved by the President,” a source said.
Source:Nation
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