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$418m: No arbitrary deduction from states, LGs – Malami

The Federal Government has denied engaging in arbitrary deductions from FAAC allocations to States and Local Governments in its pursuit of settling the $418 million Paris Club loan.

A statement signed by Dr. Umar Jibrilu Gwandu, the Special Assistant on Media and Public Relations to the Attorney General of the Federation, Abubakar Malami (SAN), indicated that the deductions were in furtherance of Federal Government’s efforts at offsetting the debt incurred by States and Local Governments in the country.

Gwandu posited that the media onslaught on what played out at FAAC October meeting that states won’t be able to pay salaries on account of the deductions is far from the truth as the problem is self-induced being a product of contractual negotiation in respect of which NGF and ALGON submitted to judicial decision legitimately entered by their consent.

“The Honourable Attorney General of the Federation denies any wrongdoing in the steps that have been taken so far to comply with the various court judgements and is also not party or privy to any of the sinister agenda or plots being insinuated in the malicious publications, but maintains that he has a responsibility to protect Federal Government from bearing liability of a judgement debt incurred by Nigerian Governors’ Forum and ALGON which is mischievously being transferred to the Federal Government.

“It is important and necessary to state, at the onset, that the deductions were on account of four judgements in contention which were delivered at various times in 2014, 2015, 2017 and 2019. Two of these judgements were Consent Judgements based on Terms of Settlement entered into by NGF in 2017 and 2019. Again, two of the four judgements were based on an earlier judgement delivered by the Federal High Court in 2013.

“It is, however, amazing that from 2013 to 2021, neither NGF nor ALGON deemed it fit to either challenge or fully comply with any of these judgements. In furtherance of the consent and settlement, the NGF itself made payments in billions to the consultants based on the same judgement it is deriding now,” Gwandu added.

He further revealed that by various letters addressed to the AGF and Finance Minister, both NGF and ALGON expressed no objection and actually recommended the same set of consultants for the payment of the judgement debts which were initially above $418 million but were reduced to the figure owing to the consistent concessional offer by the consultants.

It was added that recommendations for payment were made after claims of the consultants were subjected to verifications by both the DSS and EFCC. It was further disclosed that the Federal Government decided to step in owing to the failure of both NGF and ALGON to comply with the judgements and most importantly, to prevent a situation where the debt liability would be transferred to it.

Gwandu noted that the interest of the Federal Government to intervene in the negotiated settlement was borne out of the fact that the consultants made it a party to the action against NGF and ALGON, the implication of which was that the judgement may be executed against the interest and assets of the Federal Government over liability that was incurred exclusively by NGF and ALGON.

While insisting that the Federal Government did not act in vacuum before the decision to comply with the existing judgements was taken, Gwandu said it is curious to note that both NGF and ALGON who had actual knowledge of these judgements between 2013 and 2019, consented to their partial compliance and also undertook in 2019 to settle them from their FAAC Allocations, only turned around in 2021 to take steps to challenge the judgements.

He stated further that the Federal Government had acted on the Undertaking/Indemnity provided by NGF, while the Judgement Creditors had also obtained orders of mandamus compelling the issuance of promissory notes.

He also noted that the NGF had at various times in 2016 and 2018 received payments from the Federal Government under the guise of legal and consultancy fees related to the same Paris Club refunds.

“Specifically, NGF was paid US$86,546,526.65 and N19,439,225,871.11 in 2016 and $100 million in 2018. It was, however, convenient at that time not to complain about payment of consultants.

“Thus, the Federal Government could not fold its arms and watch while the consultants/contractors had already obtained garnishee order absolute attaching the funds of the Federal Government in the Central Bank of Nigeria on account of the fact that the refunds of the Paris Club loans were made by the Federal Government to the States and Local Governments in contempt of existing court judgements procured against NGF and ALGON by consent”, Gwandu stated further.

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