The Minister of Finance, Kemi Adeosun, on Monday said Nigerians would not get the full details of the disbursements to the 36 state governments in respect of the Paris Club Refunds until the final reconciliation of the records were completed.
Mrs. Adeosun said the Federal Government had 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,” she said.
“The inability of some sub-national governments to meet salary and other obligations was considered inconsonant with the Federal Government’s economic stimulus programme.”
She pointed out that “claims (by state governments) with regard to over deductions had been made to the Federal Government, consistently since 2005.”
To reconcile the records and facilitate full disbursement, Mrs. Adeosun said the Debt Management Office, DMO, saddled with the responsibility had initially requested for a period of 22 months to complete.
That DMO is handling the reconciliation in conjunction with the Office of the Accountant General of the Federation, OAGF and the relevant state governments.
However, President Muhammadu Buhari had directed that the exercise be completed within 12 months, considering the plight of salary earners and pensioners and the need to stimulate the economy.
This followed the inability of majority of Nigeria’s 36 states to pay workers’ salaries despite receiving government bailout.
To give the states additional support and enable them meet those challenges, the minister said the president gave an express anticipatory approval for the release of up to 50 per cent of the claim of each state, pending final reconciliation.
She said the disbursements were staggered in batches and payments made only when the claims of each state had 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 release of the first tranche, representing up to 25% of claims, being N522.7 billion commenced in December 2016. Disbursement was subject to an agreement by state governments that 50% of any amount received would be earmarked for the payment of salaries and pensions,” the minister explained.
Besides, she said, each state governor had given an undertaking that excess payments would be recovered from their share during the Federation Accounts Allocation Committee, FAAC, meeting if the final reconciliation found the amount paid under the anticipatory approval exceeding what was due to them.
Giving an update on the reconciliation exercise so far, Mrs. Adeosun said to date, nine batches have been processed, while some balances were outstanding to the possible credit of some states.
She then said disclosure can only be made after full reconciliation.
“Given the foregoing, complete and final figures can only be released and published after each state and the Federal Government have reconciled and agreed on the sums due,” she said.
She said that during the last National Economic Council meeting on Thursday March 16, 2017, President Muhammadu Buhari had instructed her and the Central Bank of Nigeria governor, Godwin Emefiele, to commence the process of resolving the balance of the approved amount.
“The overriding consideration for any further releases 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.
“The Minister of Finance would like to reaffirm the commitment of the administration to publish all relevant information on the Paris Club refunds,” she said. Click to signup for FREE news updates, latest information and hottest gists everyday
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