FG releases another N243.7bn excess debt deductions to states + allocation breakdown
Acting President Yemi Osinbajo and Minister of Finance, Kemi Adeosun.
Akwa Ibom, Bayelsa, Kano and Rivers State each collected N10 billion each of the N243,795,465,195.20 just released to the 36 states and Federal Capital Territory (FCT) in the latest round of refunds on Paris Club, London Club Loans and Multilateral debts on the accounts of States and Local Governments (1995-2002) by the Federal Government.
The release followed approval by President on May 4, 2017, in partial settlement of long-standing claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.
A statement issued by Director of Information, Federal Ministry of Finance, Alhaji Salisu Na’Inna Dambatta quoted the minister, Mrs. Kemi Adeosun as explaining that the debt service deductions were in respect of the Paris Club, London Club and Multilateral debts of the FG and States.
“While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some States had already been overcharged.
“The funds were released to State Governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers.
“The releases were conditional upon a minimum of 75 per cent being applied to the payment of workers’ salaries and pensions for States that owe salaries and pension.
“The Federal Ministry of Finance is reviewing the impact of these releases on the level of arrears owed by state governments.”
Dambatta added that a detailed report is being compiled for presentation to the Acting President, Professor Yemi Osinbajo, as part of the process for approval for the release of any subsequent tranches.