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FG Shut Down $418m Paris Club Refund


Interesting details have emerged on how President Muhammadu Buhari, last week shut down plans by the federal government to commence a phased payment of the $418 million Paris Club refund, allegedly owed four contractors from the federation account, but not before some heated debate amongst ministers had first taken place.

The instruction expressly directed to the Minister of Finance, Zainab Ahmed, followed efforts by some ministers, who during the weekly Federal Executive Council (FEC), moved against the idea being pushed by the the Attorney General of the Federation and Minister of Justice, Abubakar Malami and Ahmed, saying the idea was insensitive to time and inimical to current realities in the country.

After suspending the planned deductions, the president immediately set up a committee, majorly of Senior Advocates of Nigeria (SAN) in the cabinet to take a wholesome look at the matter again and advise appropriately.

The Nigeria Governors’ Forum (NGF), had last week, resisted renewed move by Malami to pay the money.

In a letter to the federal government, through the Secretary to the Government of the Federation (SGF), Boss Mustapha, the governors contended that, restarting the deduction process, which was being challenged in court.

According to the letter, signed by Chairman of the NGF and outgoing Governor of Ekiti State, Dr. Kayode Fayemi, the governors described the new move as an “attempt by the Attorney General of the Federation (AGF), Abubakar Malami, and the Minister of Finance (HMF) to circumvent the law and the recent judgement of the Supreme Court by surreptitiously securing the approval of the FEC to effect payment of the sum of $418 million to four contractors, who allegedly executed contracts in respect of the Paris Club refunds to the states and local governments.”

Specifically, in their letter, the governors were of the position that the essence of the definitive pronouncement by the Supreme Court was that none of the contractors recommended for payment of the sum of $418 million could be so paid, because the contracts and payments relied upon were not processed as prescribed by the constitution and the law.

However, at the FEC meeting of Wednesday, August 3, Ahmed and Malami, had presented a memo, asking the cabinet to approve the deductions from funds due to states from the federation account.

Unfortunately for the duo, prior to the FEC, the governors had written to all ministers and also met some of them in persons, explained their position as well as sought their intervention in stopping the planned deduction being pushed by both Ahmed and Malami.

Thus, soon after Ahmed and Malami made their presentations, they were immediately countered by Ministers, the Secretary to the Government of the Federation, Boss Mustapha and the Vice-President, Yemi Osinbajo.

According to THISDAY sources, the FEC members, who spoke against the deduction contended that it would be sub-judicial for any payment to be made to the contractors while cases were pending in courts.

Even more instructive, they held the view that it was insensitive of their colleagues to have brought forward a proposal for the payment of controversial debts to contractors at a time the government was battling to pay workers and fulfilling its obligations to citizens.

A source hinted: “Our argument was simple and it was the fact that since the issue was being challenged in court, and there was a supreme court pronouncement in place, it would be illegal to go ahead with the planned deductions.

“What further drove our argument home was that, we contended that the planned deductions was also made against the context of the nation’s economic crisis, poor revenue, and uncertain fiscal position. So, our the FEC would sit back and agree to that was clearly impossible.”

However, after all the ministers had submitted their arguments, the president, another presidency source disclosed, spoke in support of the ministers’ position, and instructed that the planned deductions be suspended for further review.

The president, it would be recalled, had earlier approved the payment through the issuance of promissory notes, based on proposals by Malami and Ahmed, but the move was resisted by the governors, who approached the court for redress through their attorneys-general.

The governors insisted that the matter was on appeal at the Court of Appeal in Abuja, adding that the Nigerian government should exercise restraint in its handling of the matter.

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