The federal government ordered the immediate stoppage of further deductions from the federation account over the Paris Club Funds and immediately directed a refund to the states, the deductions so far made.
Governors had in November last year kicked against the payment of $418 million and the promissory notes issued to the Paris Club consultants by the Federal Ministry of Finance and the Debt Management Office and vowed to continue to explore all legal channels available to them in ensuring that resources belonging to states are not unjustly or illegally paid to a few in the guise of consultancies.
The issue of Paris Club obligations and deductions have been a major cause of disagreement between the federal and state governments in recent time.
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.
A Federal High Court Abuja division had in 2021 dismissed an application by the attorney generals of the 36 states of the federation seeking an order to permanently restrain the Federal Government from deducting monies accruing to the state over the $418 million Paris Club refund.
The Forum had also disagreed with the Attorney-General of the Federation and the Minister of Justice, Abubakar Malami, on the payment of consultants for the Paris Club refund, calling such payments illegal.
But Malami had insisted that the governors’ forum agreed on the engagement of consultants to provide certain services for them relating to the recovery of the Paris Club.
