Nigeria: Paris Club Refund Debt - Governors Can't Back Out Anymore - AGF

10 November 2021

<i>Mr Malami says there is no going back on the deductions from the state governments' allocations to settle the Paris Club refund-related judgement debts, despite a recent court order stopping it.</sub>

The Attorney-General of the Federation (AGF), Abubakar Malami, says there is no going back on the federal government's decision to commence deducting $418million from the 36 states' accounts to settle their indebtedness to consultants and private firms concerning the Paris and London clubs refund.

This is despite the governors' opposition to it and the recent order issued by the Federal High Court in Abuja stopping the deduction of the money from the accounts of the 36 states to settle the judgment debts.

The debts had accrued from court judgments awarding the creditors, who claimed to be "consultants" and "contractors" to the states and local governments, various sums of money which currently stand at $418 million.

Some of the creditors claimed to have earned their shares of the money through 'consultancy services' of helping state and local governments to recover funds over-deducted by the federal government from their allocations between 1995 and 2002 to service the London Club and Paris Club loans.

The contractors among the creditors claimed to have executed projects for the the various local government areas of the country. The Association of Local Governments of Nigeria (ALGON) has denied the execution of the projects.

<a target="_blank" href="">PREMIUM TIMES had reported how</a> President <a target="_blank" href="">Muhammadu Buhari</a> had ignored the protests by the Nigerian Governors' Forum (NGF) to approve the issuance of promissory notes to the creditors.

The promissory notes asked to be issued by the Debt Management Office (DMO) are to be funded through deductions from the allocations of the states and local governments for a period of 10 years.

Mr Malami said it was too late in the day for the governors, through the NGF to backtrack on the indebtness they had earlier commitment to pay.

Addressing journalists on Wednesday in Abuja, Mr Malami pointed out that the NGF and the ALGON as well as the consultants entered into a consent judgment of $3,188, 079,505,.56 ($3.2billion) in 2013, which they made commitment to pay and indeed, made part payments between 2016 and 2017.

On whether the FG's insistence on the deduction would not amount to disrespecting an existing court orders and circumventing pending court cases, Mr Malami wondered why the state governments went to bed since 2013, made part payment and only decided on court cases now.

The NGF had in a statement on Monday accused the AGF of betraying public interest by supporting private interests in his handling of the Paris Club fund debt.

The governors said Mr Malami was being biased in his handling of the issue and wondered why he was in a haste in paying the consultants when the states were in need of funds.


Giving a historical perspective to the dispute, the AGF said "Sometime as far back as 2013, there was an engagement by the outgoing administration and the NGF in respect of certain consultants that were engaged by the two (NGF and ALGON) for the purpose of recovering certain amounts of money relating to Paris Club refund.

"And these consultants that were engaged have indeed delivered and fundamentally, they were not paid the fees for the services they claimed to have rendered and on account of which they approached the judicial system for the determination of their rights and indeed the enforcement of their fees," Mr Malami explained.

"Now, in 2013 parties, the then Federal Government and the governors' forum came together, agreed and submitted to a consent judgment by the court of law in 2013. That consent judgment is what gave rise to the liability in contention as we are talking today.

"Some years back, the Federal Government was approached by these consultants for the purpose of payment of their respective professional fees. The Federal Government then approached the governors forum and ALGON and the collectively walked to the Federal Government and conceded to the position that the consultants have indeed provided the services and that they were ready and willing for the payment.

"The point of interest arising therefrom is that the governors' forum and ALGON, walked to the federal government and conceding that payment should be deducted from their monies and then should be effected to the consultants.

"And then, in 2016, 2017, these deductions were carried out at the instance of the governors' forum and ALGON. Now that was the situation on the ground," Malami said.

He stated that because the federal government was suspicious of the huge claim the NGF and ALGON made on behalf of the consultants, which was in the region of $3.2billion the FG had to invite the Economic and Financial Crimes Commission (EFCC) and the State Security Services (SSS) to verify the verify the services rendered by the said consultants.

"So, when eventually the services rendered were confirmed, out of further abundance of caution, the Federal Government took steps to demand for confirmation in writing from ALGON and the governors.

"The governors individually wrote to the effect that they were liable. ALGON wrote to the effect that they were liable. And eventually this payment commenced as far back as 2016.

"Now, nothing untoward happened thereafter until perhaps of recent when the governors wrote seeking to avoid their liability.

"The implication of that, taking into consideration that the Federal Government was indeed sued as a party was that at the end of the day the liability will be placed exclusively at the door steps of the Federal Government, where in actual fact, this is a liability that was incurred by the governors' forum; this was a liability admitted by the governors' forum.

"This is a case in respect of which the governors' forum and ALGON conceded to judgment by way of submitting to a consent judgment before a court of law.

"So what I am labouring to say in effect is that one, the engagement that gave rise to this liability was an engagement that was factored by ALGON and the governors' forum.

"Two, arising from such liability, by way of creating a contractual obligation, parties submitted to the jurisdiction of the court in the form of the case instituted by consultants against the governors' forum and against ALGON, and the parties submitted to consent judgment.

"Three, the governors have indeed each provided a letter of commitment to the Federal Government that they were indeed liable, the same thing with ALGON.

"They wrote individually; the governors wrote, individually directing the federal government to effect payment of this amount. And we have the letters at our disposal, perhaps copies could be made available to you after this session.

"So, what we are saying in essence, is that this is a self-induced problem arising from concession, arising from the consent, arising from agreement of the governors' forum and arising from agreement of ALGON

"And then four, over and above all these, payment has indeed been effected over time without any objection on the part of ALGON and the governors' forum over time.

"So it is indeed amazing that the governors are now belatedly, after having serviced the same claim for over a period of four five years, are now belatedly turning round to raise objections in respect of the payment," the AGF argued.

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