Paris Debt Deductions: NLC To Monitor State Govt Receipt, Utilisation Of Refund

Paris Debt Deductions: NLC To Monitor State Govt Receipt, Utilisation Of Refund

Chris Steven, Abuja

The leadership of Nigeria Labour Congress (NLC) has directed its state chapters including the Federal Capital Territory (FCT) to start to monitor state governments’ receipt and utilisation of the refund of Paris debt deductions.

The Congress said it has come to its notice that the disbursement of the refund of Paris debt deductions has recently been made to states.

This, it said represents a major injection of funds into the coffers of the state governments.

NLC in a letter sent to all its state councils issued by its General Secretary, Dr. Peter Ozo-Eson enjoined them to monitor closely the amount received in their states and engage with their state governments to ensure that the substantial part of the funds is used for defraying outstanding arrears of salaries and pensions and gratuity.

 It has come to our notice that disbursement of the refund of Paris debt deductions has recently been made to states. This represents a major injection of funds into the coffers of the state governments.

The Congress added that it was informed that the Federal Government guideline in releasing these funds stipulates that at least fifty percent of receipts should be applied for payment of such salary arrears and pensions.

This followed approval by President Muhammadu Buhari, of a total of N522.74 billion to be disbursed to states as reimbursement for over-deductions on external debt service.

The debt service deductions according to the Minister of Finance, Kemi Adeosun were in respect of the Paris Club, London Club and multilateral debts of the federal and state governments.

The Minister had in a statement said the first tranche of N153.01 billion is currently being processed for release to 14 states.

The Ministry of Finance said state governments had submitted to the federal government claims of over-deductions for external debt service between 1995 and 2002 as a result of allocations on First Line Charge deductions from the Federation Account Allocation Committee (FAAC).
“While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.

“On the request by state governments for a refund of amounts owed by the federal government, Mr. President directed that claims be subject to verification by the Debt Management Office and a team was established and given the mandate to scrutinise claims and reconcile with available records.

“The brief for the team was also extended to include a review of interim payments made under previous administrations. Work has commenced to resolve each state government’s claim and the exercise is expected to take approximately 12 months. The exercise will be thorough, including a complete reconstruction of records dating back to the period in question,” she said