The Nigeria Governors’ Forum (NGF) on Monday denied claims that it reached an agreement with the federal government, over the controversial $418 Paris club refund payment to six consultants.
The consultants and their claims are Ned Munir Nwoko ($68.7 million); Dr Ted Isighohi Edwards ($159 million); Panic Alert Security Systems Limited ($47.8 million); Riok Nigerian Limited ($142 million); Nwafor Orizu ($1.2 million) and Olaitan Bello ($215 million).
“As far as I know, no financial transaction takes place without signing papers. Let them bring the papers that were signed; let them show us evidence of that agreement,” a spokesperson of the NGF Abdulrasaque Barkindo stated in an interview on Monday.
He also denied claims made by the lead consultant for the recovery of over-deductions from Paris and London clubs debt buyback funds Ned Nwoko, on Saturday, that the NGF received the sum of $100 million to prosecute elections in some states of the country.
“That’s a lie from the pit of hell. The Nigeria Governors Forum does not prosecute elections. There is no way an organization that runs with all the 36 governors who come from three different parties will now prosecute an election; for who?
“The point is, these people continue to fabricate things. The Nigeria Governors Forum does not involve itself (sic). As a matter of fact, we shut down during political periods. So how will anybody from the APC take money and campaign for the opposing party, because the states he (Nwoko) mentioned are Bauchi, Osun, and Ekiti. These states belong to two parties,” Barkindo said.
Four months ago, in a letter dated April 4, the 36 states of the federation had warned the federal government not to tamper with funds accruing to them and the 774 local councils under the guise of satisfying an alleged $418 million London/Paris Club Loan refund-related judgment debts.
The letter which was signed by the body of Attorneys-General of the Federation Interim Chairman Moyosore Onigbanjo, was in response to a November 11, 2021 letter from the Minister of Finance, Budget, and National Planning, advertising the commencement of the deduction for liquidation of the alleged judgment debts.
The states said they were not parties to any suit on the London/Paris Club refund, and as such were not liable to any person or entity in any judgment debt being relied on by the federal government.
The NGF argued that an attempt to restart the deduction process, which is in Courts and for which the Supreme Court has made a pronouncement, would be unconstitutional, causing President Muhammadu Buhari to direct the Minister of Finance Zainab Ahmed, to suspend plans to begin the deduction. But the Attorney General of the Federation Abubakar Malami, insists the NGF had no basis to reject the proposed deductions.
Background
In 1985, Nigeria owed the Paris Club creditors $8 billion which grew in interest to about $30 billion in 20 years. By October 2005, the Nigerian delegation headed by then minister of finance Ngozi Okonjo-Iweala, negotiated the Paris Club agreement which stated that the club would “write off” 60 per cent ($18 billion) of Nigeria’s debt to members of the club, while Nigeria would pay back the remaining 40 per cent in two phases
The federal government entered into agreements with state governments to deduct certain amounts from their federal allocation to service the debts and by April 2006, Nigeria transferred $4.5 billion to the recipient countries to complete repayment of all debt owed to the Paris Club of creditors. However, some states were overcharged in the debt servicing arrangement and applied for a refund.
In December 2016, the federal government agreed to refund the states, but in three tranches. but controversy ensued when some consultants demanded money for their service in facilitating the payment. A former Military Governor of Kaduna State, Abubakar Dangiwa Umar, said some governors agreed with some consultants to pay fees ranging between 10 to 30 per cent to secure a refund.
There was also an allegation that about N3.5 billion was paid out as consultancy fees by a collective of the NGF and some of the funds were reportedly traced to the bank accounts of senior members of the Senate.
President Buhari had approved the payment of the contractors through the issuance of Promissory Notes, but this was resisted by the NGF. One of the contractors, Riok Nigeria Limited, who is a beneficiary of the Promissory Notes for $142 million and who had lost at the Court of Appeal, further appealed to the Supreme Court in suit no.: SC 337/2018.
The Supreme Court on June 3, dismissed Riok’s appeal as lacking in merit, noting that neither the NGF nor the Association of Local Governments of Nigeria (ALGON) has the power to award contracts and charge the same directly to the Federation Account as done in the case.
The apex court held that funds belonging to a state or local government must be kept in an account belonging to the State or Local Government as the case may be disbursed or expended by the state strictly in the manner and for the purposes prescribed in the Constitution and an Appropriation Law.
The dismissal of RIOK’S case by the Supreme Court also affected the payment to two private lawyers to RIOK – Nwafor Orizu ($1.2 million) and Olaitan Bello ($215 million) who were also beneficiaries of Promissory Notes issued by the Debt Management Office (DMO). Besides RIOK and the two lawyers, the NGF is also challenging the claims made by the other contractors.
However, the minister of justice has accused the state governors of reneging on their agreement with the consultants, insisting they have no basis for complaining about the Paris Club refund deductions paid to consultants they hired.
“The Governor’s forum comprising all the governors sat down commonly agreed on the engagement of a consultant to provide certain services for them relating to the recovery of the Paris Club. So, it was the governor’s forum under the federal government in the first place that engaged the consultant,” Malami said.
According to him, among the components of the claim presented for the consideration of the federal government by the governors, was a component related to the payment of these consultants, implying that the governors had recognized the consultants and upheld their claims.
However, the Chairman of the NGF and Governor of Ekiti State Kayode Fayemi, has insisted that there was no collective agreement between the consultants and the NGF, adding that the forum has requested the consultants to provide evidence of work done.
“There is no component that compels the governors’ forum to pay consultants anything, and there is no agreement between the consultants collectively and governors collectively,” Fayemi maintained.