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States start receiving over-deducted Paris Club debt refund

..As Benue expects N75 billion

The 36 states of the federation are heaving sigh of relief as the Federal Government has approved refund of over-deduction for Paris and London clubs debts made on states by the Debt Management Office.

This coming as Federal Government will anytime from now commence refund of over deduction already cancelled by Paris and London Clubs.

Benue State Commissioner for Finance, Mr David Olofu disclosed to newsmen on Monday that the state government is expecting about N75 billion from the refund.

According to him, “The issue of refund of over deduction of Paris and London Clubs debts was not peculiar to Benue but all the states. At the time this administration came on board, the governors’ forum approached the President who agreed to pay the over deduction to the states.”

“The process for the refund started with the engagement of consultant to reconcile the account with Central Bank of Nigeria and Federal Government.

“During the negotiation of debt cancellation in 2006, states were not carried along so when the governors’ forum met, it was agreed that a consultant be engaged to reconcile the account and both the consultant and Federal Government have come to conclusion.

“The money is the monthly first line charge of the loan from Paris and London Club debts between 1995 and 2002.”

He explained that at the initial stage, it was agreed that 50 per cent of the amount be paid to each of the states but added that, “due to paucity of funds, the Federal Government later approved the release of 25 percent of the said amount.

“The approval has been given by Federal Government but as am speaking to you now (Monday) we are yet to receive alert to that effect.

“So what we are expecting as refund by our local arrangement is between $ 181 million and $186 million and Central Bank of Nigeria has agreed that the amount be paid at N305 to a dollar, but of now we are expecting something between $45 million and $46million which if converted at CBN approved rate is between N13billion and N14billion.

The commissioner further explained that the state government has decided to use part of the money to offset the salary arrears of civil servants and pension allowances.