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The fuss, intrigues over unaccounted Paris debt refund

By Chijioke Nelson
26 March 2017   |   5:21 am
Nigerians have become used to the mention of huge funds that are not traceable to development, hence the bulk of the refund is not the matter. The matter is not also the request for the refund, because it is a just course.

Nigeria;s finance minister Kemi Adeosun and the Vice president Yemi Osinbajo at the 2nd Presidential Quarterly Business Forum in Abuja

Nigerians have become used to the mention of huge funds that are not traceable to development, hence the bulk of the refund is not the matter. The matter is not also the request for the refund, because it is a just course. It is about the rendition of account, particularly the first tranche, which is now obstructing the release of the second tranche.

It needs not be over-emphasised that Nigerians are already worn out with sufferings, with no end in sight for the gloomy situation and as such, need hope, not ‘grammar’, action, not just paper work and promises. That is what the central government flaunts in the name of “Change.”

Granted, the Paris London Clubs loan refund’s effort is a history of long struggle to get reimbursement for the excess deductions since 2005, which were done from states’ due allocations over the years.

The lack of success may have largely been a combination of suspicion by previous administrations that the money would be frittered away by the governors, initial non-admittance to the excess deductions by Federal Government and non-committal in its pursuit by governors, as they have always had enough, except in the last two years.

Of course, the renewed drive is the desire to reflate the economy at a time when states were insolvent and unable to pay salaries on the part of the Federal Government and depleted allocations to states that have nearly stopped their very existence, as each has lost more than N2b monthly since the current revenue crisis.

But the spokesman of the governors, under the aegis of Nigerian Governors’ Forum, Abdulrazaque Bello-Barkindo, has denied any foul play with the funds.

“Nothing illegal was done and no monies 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,” he said.

He also noted that every decision that was taken in respect of all the transactions was not a matter of the minority, as full consent and blessing of the 36 governors were unanimous.

However, he did not state what the money was used for and it is obvious that some states still owe workers and retirees’ entitlements till date.

Except Lagos State Governor, Akinwunmi Ambode and his counterpart in Cross River State, Ben Ayade, no other state chief executive has made claims on the safety of the money, as well as clear plans to invest the money or part of it wisely.

“We are working on the financial template and this is the breakdown – government has a sinking fund that we want to put into this bond. You are aware that the Federal Government paid the refund of the Paris Club Loan last December and this is money belonging to the state governments due to the refund and so Lagos State decided not to touch its share of the Paris Club refund.

“Right now, we have a sinking fund of N14.5b that is already put in place to drive this public transportation bond. We refused to touch our money and we believe that the second batch of the refund should be paid next month and eventually that will be N29b that we will have.

“I will add another N1b to it making it N30b to kick-start this initiative. By the time we have N30b as a sinking fund to drive the bus initiative against the bond of N100b that we want to put into the market, there will be that credibility and credence that the bond will drive itself and that is the whole idea,” Amode said.

Nwaogwugwu, earlier mentioned, added: “I know that the Federal Government gave states a budget support, which are deductible from the monthly allocations. They all still have their allocations, as much as, accumulated debts’ deductions would permit. Now they have these refunds. Why are some states not improving? I insist they have much to explain,” he added.

Bello-Barkindo also affirmed “there were conditions attached to the disbursements, but these arose from the collective and voluntary resolution of the governors and not any draconian order from any quarters.”

Whether self-imposed conditions or orders from the Federal Government, the fact is that there is rule. So, were the conditions adhered to? Rather than waste more time to respond to media reports, is it not rather more apt to render the accounts and get fresh disbursements instantly.

Doubting the possibility of judicious use of the refunds, the Lead Director of Centre for Social Justice, Eze Onyekpere, said that projects by the governors in their various states should be the testimony, but there was none.

“The governors have long been known for mismanaging ‘windfalls’ of this sort. The subsisting council Act legalised State Joint Local Government Account, putting the state governors in control of council funds, which they misappropriate alongside state budget, while councils rarely operate with budgets for functional ones,” he said.

Historically, Nigeria has a bad record in taking advantage of opportunities that could easily be described as “windfall.” Currently, Nigeria’s budget is battling with visible evidence of project execution against huge revenue base accrued from crude oil windfall before now and a whooping $67 billion debt profile, which were majorly brokered in the last six years.

Nigeria’s debt sojourn, which started in 1965 and recorded the substantial obligor level to the International Monetary Fund by 1970 at $970m sustained the dangerous trend to $32.5b in 2000, with huge debt service provision as the consequence on the yearly budgets.

However, the debt forgiveness of 2006, brought it down to $6b, but between June 2007 and June 2016, the country had gone back to the “mire”, to the extent that the debt service provisioning for the 2016 fiscal plan was running a close rank with capital expenditure proposal.

Indeed, the country got the debt forgiveness, but lost the benefits; entered into new debts that are worse than before, still never invested justifiably the proceeds. The result is the huge infrastructure challenge and growth challenge that turned into recession.

According to Onyekpere, there is practically nothing to show for the huge funds collected by the state governments as poverty is increasing at the local level and Nigerians are being denied access to the basic necessities of life like portable water, functional schools, primary health care services, electricity and feeder roads, among others.

The stage seemed set for a showdown between the Federal Government and the governors, as the Minister of Finance, Mrs. Kemi Adeosun, has hinged the release of the second tranche of the refund on projected cash flows of the federation, reconciliation of the disbursed tranche, outstanding and consultation fee issues.

But a source from the ministry affirmed that the first disbursement was subject to an agreement by state governments that 50 per cent of any amount received would be earmarked for the payment of salaries and pensions.

“It is standard practice in the Ministry of Finance to undertake independent monitoring of compliance with the terms and conditions of funds released. This will be conducted in due course,
“ the source said.

However, a lawyer and fiscal governance expert has said that the states owe no explanation before they get their refund, because the money belongs to them and ought not to be deducted beyond limit ab initio.

He said his stance does not mean support for misappropriation of public fund, which are hugely associated with the state governors. The expert said the best Federal Government can do is to monitor their spending, using state apparatus and perhaps, wait until they finish their tenure to prosecute them, as immunity clause covers their rascality at present.

“Except government claims that it has no provision for the refund at present, otherwise it is illegal to hold on to their money,” he said.

Already, there are calls from several quarters for an inquiry into how the first tranche of the Paris-London Club refunds were expended by some states.

The National President of the Association of Small Business Owners of Nigeria, Dr. Femi Egbesola, said it is unfortunate that the so-called leaders, who are not sensitive and focused, especially in this terrible period, would play to the gallery with this precious opportunity.

He called on government to influence the spending of the funds in the states to favour infrastructure, although the ones disbursed are now deep into private pockets and “white elephant” projects.

“The various State Houses of Assembly are shame and disaster in this country. They are so weak and more like puppets. These are people who should deliver the poor in the state, but they have let themselves be cowed and sometimes voluntarily offer to be used,” he said.