Last Friday’s meeting of FAAC, the Federation Account Allocation Committee, had ended in a deadlock following the opposition raised by state governments to the commencement of deduction of the controversial $418m from the local governments’ accounts to pay consultants engaged for the Paris Club refund.
The FAAC stalemate is likely to bring about fresh dialogue between the state governors and President Buhari, as feelers indicated in Abuja on Monday.
A top official of the Federal Ministry of Finance, Budget and National Planning, had revealed on the condition of anonymity, that, “The governors’ meeting with the President is expected to hold this week, because of the urgency of the matter. Without the allocation, the states cannot pay salaries.”
The Federal Government had in 2006 paid $12bn to get an $18bn debt write-off by the Paris Club of international creditors.
After realizing that the payment was made directly from the revenue accruing to the entire federation, states and local governments which did not owe the Paris Club demanded a refund.
To press the demands, the services of consultants were engaged. Now, the consultants claim a percentage of the refund as payment for services they said they rendered to the states and local government councils.
Some of the contractors also claimed that they executed projects across the country for the Association of Local Governments of Nigeria.
But, the governors contend that the said projects which the consultants refer to as awarded by ALGON, are mostly non-existent.
They, the governors, had insisted on a forensic audit, while the contractors and consultants went to court.
Abubakar Malami, Attorney-General of the Federation, negotiated an out-of-court settlement with the contractors and consultants, with the sum of $418,953,670.59 agreed on as the judgment debt.
The Nigeria Governors’ Forum subsequently went to court to stop the payment of the controversial sum to the consultants.
In a letter dated September 3, 2021 and signed by a Senior Advocate of Nigeria, P. H. Ogbole, the governors said the money should not be deducted from the local governments’ accounts.
The states’ commissioners of finance rejected the commencement of the deduction, at the FAAC meeting on Friday, contending that the deduction is illegal because the issue is in court.