Nigerian state governors eager to have the $3.45 Billion second
tranche of the London-Paris Club loan refund may have to wait longer
than planned.
The Federal Government is withholding the cash – no thanks to what is believed to be the mismanagement of the first tranche.
The delay follows the ongoing probe of N19billion and $86.5million
deducted by the Nigeria Governors Forum (NGF) from the first tranche of
N522.74billion.
The Presidency is awaiting the outcome of the investigation by the
Economic and Financial Crimes Commission (EFCC) on the first release.
The government is believed to have tactically attributed the delay in
remitting the second tranche to the “cash squeeze” the country has been
undergoing.
But the governors are angry that some Presidency forces have influenced
President Muhammadu Buhari to have a “rethink” on the second tranche.
The President had on April 2, May 24 and May 31, 2016 met with the
leadership of the NGF on the financial crisis affecting most of the
states, especially non-payment of salaries and pensions.
The governors demanded $6.9billion refund from the Federal Government to
states and local governments for alleged over deduction for loans
servicing.
They also asked for refund of the money spent by the states on Federal Government projects.
The President conceded to the governors on five conditions:
A thorough reconciliation be carried out between the Federal Government and the states;
50% of the claims submitted by the states be released, prior to completion of the reconciliation, to support states;
25-50% of the cash released will be used to settle outstanding salaries and pension arrears in most states;
There will be judicious use of the remaining 50% on development projects; and that
Local governments will have access to their share of the refund.
The presidency is said to have realised that most of the governors have
defaulted in the conditions attached to the release of the refund.
The government is worried about the diversion of N19billion and
$86million deducted for payment to consultants and legal advisers
engaged by the NGF and some states.
A government source, who spoke in confidence, said: “The Buhari
administration meant well. To show its commitment, it raised a Refund
Committee comprising the Acting President, who is also Chairman of the
Board of DMO and the Economic Council; Chief of Staff, Abba Kyari(the
chief driver of the Refund Movement; The NGF chairman, Alhaji Abdulaziz
Yari (Co-Chief Driver of the Refund Movement); the DG of NGF, Mr.
Asishana Okaru (Co-odinator of states); Suraj Yakubu (GSCL Consulting
Limited) as consultant-in-Chief; Bizplus Consulting Limited, another
Consultant, and Alhaji Sani Anani, the refund marketer.
“The committee came up with a template for the release of the first tranche of N522.74billion.
But the security reports on how some governors misapplied the money have shocked the Presidency.
“Many states still owe workers unpaid salaries for as many as 10 months.
In some states, pensions have accumulated for about 12 to 15 months.
Instead, some governors have diverted the refunds to private use.
“The discovery of EFCC on how some of the loan refunds got into private hands made the government uncomfortable.”
According to the source, “this is why the Federal Government has withheld the second tranche to the states”.
At a meeting with Minister of Finance Mrs. Kemi Adeosun, the governors
were said to have been angry that the second tranche was yet to be
released.”
Asked why the government was keeping the governors in suspense on the
second tranche of $3.45billion, the source said: “most of the states did
not meet the conditions for the release of the first tranche as they
still owe some salary arrears.
“As I am talking to you, the reconciliation of claims by the Federal
Government and the states is yet to be concluded. The government is
being cautious to avoid overpayment to states, the source said, adding:
“More importantly, the EFCC is currently looking into some allegations
on the mismanagement of N19billion and $86.5million paid into the
accounts of the NGF for payment to consultants and legal advisers. Some
consultants who were not hired have been paid while those who did the
reconciliation jobs are denied their rights.
“The NGF said it will cooperate with the EFCC. We are awaiting the outcome of the investigation before remitting more refunds.
“We are delaying in effecting more refunds because we need to be
circumspect. The governors are angry no doubt but there is no point
allowing public funds to go into wrong hands.”
Some of the infractions noticeable in the management of the first tranche of the London-Paris Club loan refunds are as follows:
Computation of state records done at a private home in Maitama belonging to a governor;
Accounts initially opened in the names of two lead consultants but the details of who to be paid were later changed;
N19b remitted into two accounts of NGF;
Commission to consultants cut from 10% to 2% but 5% was on paper as paid;
CBN paid directly to each state without the knowledge of the Accountant-General of the Federation;
Part of the N19b commission traced to a governor’s account and some individuals, including some members of National Assembly;
Apart from central consultants, governors hire separate consultants;
Some governors conceded about 10-20% commission to their consultants;
In some states, governors served as consultants through proxies;
Consultants yet to be paid because the NGF changed commission formula as soon as the first tranche was remitted;
Some governors deviated from using 25% to 50% for payment of
outstanding salaries and pensions as agreed with President Muhammadu
Buhari.
