There are grumblings among some civil servants in Abuja over the payment of 10 per cent deducted from the $13 billion first line charge deduction from state government accounts for the payment of multilateral Paris Club, London Club and other sundry external debts between June 1995 and April 2002.
President Muhammadu Buhari, on December 3, 2016, approved the payment of N522.7 billion as refund to state governments, following conclusion of work over the issue by a committee set up to determine how much each state was due.
In the aftermath, however, it was revealed that 10 per cent of the total amount due, was paid to both a consultant and a lawyer that advised on the computation and compilation.
According to competent sources in Abuja, however, “there was absolutely no need for government to pay any amount of money to any consultant on this matter, because all the documents used was the work of a team of civil servants drawn from the Federal Ministry of Finance, Accountant-General of the Federation, Debt Management Office, Central Bank of Nigeria (CBN) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), which served as secretariat and supervisor of the verification exercise between 2005 and 2007.”
The source explained that prior to June 1995, state governments were servicing their external debts directly, but the Abacha regime discovered that many of them defaulted and were in arrears.
“In order not to put Nigeria in disrepute, therefore, the Abacha regime decided to deduct such debts as first line charge before revenues were shared and allocated to the three tiers of government.
“However, on April 5, 2002, the Supreme Court, through the famous Resource Control Suit, declared first line charges as illegal and directed that each state should, henceforth, service its debts through deductions at sources from statutory allocations,” the source continued.
Tribune Online gathered the judgment led to the setting up of a reconciliation committee, which during the course of its work also set up another technical sub-committee following allegations by Adamawa and Taraba states created from the defunct Gongola State.
“The defunct Gongola State, now Adamawa and Taraba states, claimed that there were too much overdeductions from their statutory allocation, stabilisation account and first line charges.
“They also claimed that in addition, there were fictitious loans created for them and deductions for servicing such fake loans were made from their allocations.
“The two states substantiated their claims with enough evidences which led to the reconciliation committee to set up technical sub-committee consisting of nine members to look at all payments made by Adamawa State from the 80s till 2005.
“And it was that committee on states’ external debt reconciliation exercise that wrote the final reports used as basis for refund in 2016/17 as ordered by President Buhari.”
Following the verification, Adamawa and Taraba states were jointly refunded $104 million in 2008 for fictitious loan deductions and also in 2010, Adamawa State was refunded $85 million, while Taraba State got $77 million as part of their overdeductions raising their refund to about 60 per cent.
It was further learnt that after the reconciliation exercise, the Federal Government was advised to refund all the states, whose debts were overdeducted during the era of first line charge, but the then president insisted that since the issue involved all the states, it should be taken as national sacrifice.
“So, the refund paid to the states recently on overdeductions on first line charges was supposed to be automatic without using so-called consultants because the technical sub-committee set up during the reconciliation exercise already computed all the figures and shared them in tabular form by using revenue allocation formula.
“It was either the so-called consultant committed plagiarism by claiming to have computed the figures or governors’ forum did the fraud by using the consultant for what was already done and computed in 2005.
“Somebody just got hold of the work we did and used it as a basis to collect billions claiming to be a consultant,” one of those who were involved in the reconciliation exercise fumed while speaking with Tribune Online.
Another source claimed that state governors have formed the habit of blackmailing Buhari for money, citing the first bailout package which was intended for the direct payment of workers’ salaries by CBN, but was eventually used for other things when the president was prevailed upon.
Nonetheless, of the total N522.7 billion approved for payment over the course of a year, “30 states were accommodated in the original plan. A total of N349,591,951,881.11 were shared to them.
“Other states were later accommodated, including Jigawa- N13.2 billion; Adamawa- N4.8 billion; Taraba- N4.2 billion; Kwara- N5.4 billion and Oyo- N7.2 billion, which totalled N34.8 billion. Total approved for payment was N522.7 billion.
and then