FG releases details of first tranche Paris Club N516.38b refund to states

Finance Minister, Kemi Adeosun

The Federal Government has released a state-by-state breakdown of the first tranche of Paris Club refunds paid to date, amounting to over N516. billion. The details were contained in a statement yesterday by the Director of Information, Federal Ministry of Finance, Alhaji Nai’Inna Salisu Dambatta.

According to the statement, the payments were made to the 36 states and the Federal Capital Territory (FCT) upon the approval of President Muhammadu Buhari on November 21, last year in partial settlement of long-sanding claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.

The debt service deductions are in respect of the Paris Club, London Club and multilateral debts of the Federal and State Governments. While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged. 

The funds were released to state governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers. The releases were conditional upon a minimum of 50 per cent being applied to the payment of workers’ salaries and pensions.

The Federal Ministry of Finance is reviewing the impact of these releases on the level of arrears owed by state governments. A detailed report, according to the statement, was being compiled for presentation to the Acting President Yemi Osinbajo as part of the process for approval for the release of any subsequent tranches.

Rivers State got the highest refund of N34,925,785,322.06, with FCT receiving the lowest of N1,369,735,000.09.

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