FG Bars States Owing Salaries from Accessing $2.69bn Paris Club Refunds

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Kemi Adeosun

The federal government has said that states must clear backlog of salaries and other related staff arrears before they would be able to access the remaining $2.69 billion Paris Club Refunds.

The Director of Information, Federal Ministry of Finance, Mr Hassan Dodo, on Tuesday, said the federal government would commence phased payments of the refund to the states once the condition and several others were met.

“The DMO led the reconciliation process under the supervision of the Federal Ministry of Finance. The final approval of $2.69 billion is subject to some conditions.

“Salary and staff related arrears must be paid as a priority. Also commitment to the commencement of the repayment of Budget Support Loans granted in 2016 must be made by all states.

“Furthermore, they must clear amounts due to the Presidential Fertiliser Initiative and make commitment to clear matching grants from UBEC.

“This is in cases where some states have available funds which could be used to improve primary education and learning outcomes,” Dodo said in a statement.

The issue of Paris Club loan over-deduction had been a long standing dispute between the federal government and the state governments, dating back to 1995.

In response to the dispute, President Muhammadu Buhari directed that the claims of over-deduction should be formally and individually reconciled by the Debt Management Office (DMO).

This reconciliation commenced in November 2016.

As an interim measure to alleviate the financial challenges of the states during the 2016 recession, the president had approved that 50 per cent of the amounts claimed by states be paid to enable them clear salary and pension arrears.

This approved sum was released to the states between December 1, 2016 and September 29, 2017.(NAN)