Adeosun clarifies Paris Club refunds

The Minister of Finance, Mrs Kemi Adeosun, has given assurance to the public that the Federal Government has consistently complied with all extant rules and regulations in the disbursement of the Paris Club refunds to State Governments. In a statement issued by her Special Adviser, Mr. Festus Akanbi, the Minister said that the Federal Government’s disbursement process is transparent and targeted at the attainment of specific economic objectives.

“The inability of some subnational governments to meet salary and other obligations was considered inconsonant with the Federal Government’s economic stimulus programme. Claims with regard to over deductions had been made to the Federal Government, consistently since 2005,” she stated. “The Debt Management Office (DMO) initially requested for a period of 22 months to complete the reconciliation and facilitate disbursement.

However, President Muhammadu Buhari, considering the plight of salary earners and pensioners and the need to stimulate the economy, directed that the exercise be completed within 12 months.“In addition, Mr. President gave an express Anticipatory Approval for the release of up to 50per cent of the claim of each state, pending final reconciliation.

That reconciliation is undertaken by the DMO, Office of the Accountant General of the Federation (OAGF) and the relevant State Governments. Accordingly, the disbursements are staggered in batches and payments are only made when the claims of each state have been reconciled with the facts at the disposal of the Federal Government.”

She stated that information was available that some states had been paid either in full or in part, under previous administrations, adding that this necessitated a more detailed review, for the states in question.

The Minister disclosed that the release of the first tranche, representing up to 25per cent of claims, being N522.7billion commenced in December 2016, pointing out that disbursement was subject to an agreement by State Governments that 50per cent of any amount received would be earmarked for the payment of salaries and pensions. She further revealed that each Governor also gave an undertaking that excess payments would be recovered from the Federal Accounts Allocation (FAAC), if the final reconciliation found that the amount paid under the Anticipatory Approval exceeded that due.

“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.”

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