Why govs paid consultants N19bn from Paris-London Clubs refunds

More information has come to light as to how about N19 billion was paid out to consultants by the governors from the first tranche of the Paris-London Club refunds to the states.

There had been allegations that the deductions made in the name of consultants from the first tranche of the N522.74 billion deductions found their way into the private accounts of a few of the governors, and some other individuals.

The Economic and Financial Crimes Commission (EFCC) is still investigating the allegation even as President Muhammadu Buhari last Thursday ordered the release of the second tranche of the refund to states.

The Nigeria Governors Forum (NGF) at the weekend, however, denied that there was any attempt to cheat, and that monies meant for consultants were duly paid out.

The group in a statement by its Head of Media and Public Affairs, Abdulrazaque Bello-Barkindo, agreed that monies were paid out to many consultants, but refused to mention the amount involved.

“Indeed, a number of consultants were saddled with the task of verifying the amounts due to each of the states. These consultants were recruited by the respective states but were eventually collapsed into a consortium of only a few, even though the others who did not make it to the final group were reimbursed according to their input.

“It may interest the readers that many more consultants throughout the country are still insisting that they did work on this same Paris-London Clubs repayments since a decade ago and that they are entitled to some compensation as well.

“Many of them had actually and verifiably done some work in the past and negotiated a fee of between 10 per cent and 30 per cent, with the different states that engaged them. It was therefore immoral and impossible to deny each their due, provided their input is verified and justified”, the NGF stated.

On allegations that the money was shared by about seven of the governors, and a few other individuals in the know of the consultation deal, Bello-Barkindo said that “every decision that was taken in respect of all the transactions was with the full consent and blessing of the 36 governors.

“We therefore find the insinuation in the media that monies went into the private accounts of seven unidentified governors as not only preposterous but mischievous. This is more so because none of the reports was able to identify a single governor, not to talk of seven”.

He also stated that since the current leadership of the body stepped into the matter of the refunds, which started as early as 2005, nothing illegal had been committed in the entire process leading to the final disbursement to states of the first tranche of Paris-London Clubs repayment of the excess deductions from states’ coffers and the refund of their loans.

“It is important to state that in approving the repayment, due process was diligently followed and each and every approving authority, including the Federal Ministry of Finance, the Office of the Accountant-General of the Federation, the Central Bank of Nigeria and the Office of the Auditor General of the Federation as well as the National Assembly were duly informed from the beginning to the end of all the transactions.

“Nothing illegal was done and no money was paid into the personal account of any governor, legislator or top officials at any of the levels and arms of government in the country”, the statement said.

Read also: Gov Dickson wants Makarfi to resign as solution to PDP crisis

Findings revealed that the Paris-London Clubs loan refund has been on the cards since 2005, when successive state governors had tried to get reimbursement for the excess deductions from their states in the past without success.

The bubble burst on the commission for consultants when it was discovered that payments were to be made from the first tranche of refund from deductions made from the states to certain consultants without them knowing or even approving their hire in the first place.

It was alleged that while some state governors conceded about 10-20 per cent commission to their consultants, accounts were initially opened in the names of two lead consultants but the details of who to be paid was later changed, and about N19billion remitted into two accounts of NGF.

There were allegations too that some governors deviated from using 25 to 50 per cent for payment of outstanding salaries and pensions as agreed with President Muhammadu Buhari, an infraction, among others, said to have angered some governors who vowed not to allow any deduction from their share for consultants.

Some governors who spoke in confidence, lamented that they contributed N19billion as consultancy fees but some consultants had approached them that they have not been paid, and that the money had been diverted to some private accounts.

A June 1, 2016 memo by the Minister of Finance, Mrs. Kemi Adeosun on the recommendations of the Federal Government Committee on Over Deductions of Foreign Loan Obligations from states, said in part: “Following incessant claims by states for the refund of over deductions of foreign loan obligations(Paris Club and London) states, Mr. President constituted a committee comprised of the Federal Ministry of Finance (FMF), Debt Management Office (DMO), Office of the Accountant-General of the Federation (OAGF) and the Central bank of Nigeria with the Hon. Minister of Finance as chairman.

“The Terms of Reference of the Committee are:

(i). To look into the claims of liabilities owed to states by the Federal Government and come up with concrete, coherent and permanent solution to the recurring claims of over deductions on foreign loan obligations from states.

“(ii) To develop a framework for assessing and validating claims made by the states; and

“(iii) To produce a Federal Government Policy paper stipulating the guidelines and procedures for assessing, validating and settling the claims by states.

“The committee after exhaustive deliberations agreed as follows: (i) “That it was appropriate to consider states’ requests for the refund of claimed over deductions on Paris and London Club debts.

(ii) “However in the light of the current lean resources and cash flow constraints of government. Long term approach should be adopted in addressing the matter, perhaps through the issuance of long dated instruments to states whose claims would have been authenticated through verification process.

(iii) “The states with genuine claims would be required to make their submissions to the Honorable Minister of Finance, attaching all relevant documents in support of the claims.

(iv) “All claims by all contending states of the Federation will be considered to establish the actual amount of the liability before the Federal Government would begin to settle them in a fair manner.

(v) “In order to bring the phenomenon of such continuous claims to a closure, all states will be communicated that any which has substantiated claim should submit their request for refund within a given time frame after which such requests will no more be entertained.”

The states had based their requests on unaccounted deductions on “Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) Report of the Reconciliation of State Governments’ External Debts, Vol. 1 (May 2007)”.

Some states sought refund from 1982 to 2006, others put their timeline at 1995 to 2006. In one of their letters to Vice President Yemi Osinbajo on the issue, the states indicated that the demand for refund began during the tenure of a former Minister of Finance, Dr. Ngozi Okonjo Iweala.

 

RipplesNigeria ….without borders, without fears

Click here to download the Ripples Nigeria App for latest updates

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now