Paris Club refund: We’re reviewing states’ claims, says Adeosun

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Ifeanyi Onuba, Abuja

The Minister of Finance, Mrs. Kemi Adeosun, on Monday stated that the Federal Government would within 12 months carry out a detailed review of the claims submitted by the states as over- deduction on the Paris Club debt.

She said that while the states had all submitted their respective claims, President Muhammadu Buhari had reached an agreement with the governors that the reconciliation process be concluded within one year.

The minister, in a statement issued by her Media Adviser, Mr. Festus Akanbi, explained that while the Debt Management Office had initially requested for a period of 22 months to complete the reconciliation and facilitate disbursement; the President, after considering the plight of salary earners, directed that the exercise be completed within 12 months.

She described the directive by the President last week for the release of up to 50 per cent of the claims of each state pending final reconciliation as “anticipatory approval,” adding that reconciliation was currently being undertaken by the DMO, Office of the Accountant General of the Federation and the relevant state governments.

Accordingly, the minister explained that the disbursements were staggered in batches and payments would only be made when the claims of each state had been reconciled with the facts at the disposal of the Federal Government.

The statement read in part, “The Minister of Finance has deemed it necessary to address the issue of Paris Club refunds and wishes to assure 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.

“The Federal Government’s disbursement process is transparent and targeted at the attainment of specific economic objectives. The inability of some sub-national governments to meet salary and other obligations was considered in consonant with the Federal Government’s economic stimulus programme.

“Claims with regard to over deductions had been made to the Federal Government consistently since 2005.The Debt Management Office 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.”

It added, “Mr. President gave an express anticipatory approval for the release of up to 50 per 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 and the relevant state governments.

“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.”

“Specifically, information was available that some states had been paid either in full or in part under previous administrations. This necessitated a more detailed review for the states in question.”

The statement explained that the release of the first tranche, representing up to 25 per cent of claims, estimated at N522.7bn commenced in December 2016, adding that this was subject to an agreement by state governments that 50 per cent of any amount received would be earmarked for the payment of salaries and pensions.

“In addition, each governor gave an undertaking that excess payments would be recovered from the Federation Accounts Allocation Committee 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.”

The minister in the statement said so far, nine batches have been processed, while some balances remained outstanding to the possible credit of a number of states.

She said that further release of funds would be done based on availability of cash flows to the federation, adding that the final figures could only be released and published after each state and the Federal Government had reconciled and agreed on the sums due.

The statement added, “At the National Economic Council meeting on Thursday, March 16, 2017, President Muhammadu Buhari instructed the Minister of Finance and Central Bank Governor to commence the process of resolving the balance of the approved amount.

“The overriding consideration for any further release will be the current and projected cash flows of the federation as well as the outcome of the independent monitoring of the compliance with terms and conditions attached to the  previous releases.”

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