…As Finance Ministry, Labour, others demand accountability from states before further releases
By Omoniyi Salaudeen and Onyedika Agbedo
IN spite of the ecstasy that greeted the Federal Government’s release of N522 billion being the first tranche of London-Paris Clubs loan refund to the states in December last year, President Muhammadu Buhari’s recent directive that the second tranche of the fund should be released without further delay is now mired in controversy. The President had at the National Economic Council meeting in Abuja on Thursday, March 16, directed the Minister of Finance, Mrs. Kemi Adeosun, and the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, to implement the instruction “appropriately and with dispatch.” The amount to be refunded to the states in the second tranche is reportedly about N500 billion.
President Buhari had premised his directive on the need for the states to be able to settle backlogs of unpaid salaries and pension arrears of their workers. “One of these basic things is the issue of salaries. It is most important that workers are able to feed their families, pay rent and school fees, then other things can follow,” the President was quoted to have said via a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu.
But rather than jubilate over the development, Nigerian workers appear to be disapproving of any further disbursement of the fund to the states presently. The leadership of both the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) had expressed reservations over how the initial refund was spent by the state governors and were therefore circumspect over the release of further refunds. The workers’ unions urged the Federal Government to withhold the funds until it must have investigated how the governors expended the initial refund.
President of the TUC, Mr. Baka Kaigama, in an interview with Sunday Sun, lamented that despite the release of money meant for the payment of salaries, most workers had not been fully paid.
“The President has said that they should pay salaries and pensions as priority items on the disbursement. But that was not done. Our position is that government should first of all find out how the disbursement of the one earlier released was done before the release of another one. Labour has no control over how the money should be channeled. And it does not have control over how it should be disbursed. But we can ask for probe. We are not auditors; we are not Independent Corrupt Practices Commission (ICPC) and we are not the Economic and Financial Crimes Commission (EFCC). These are under the control of government,” Kaigama said.
The General Secretary of the NLC, Dr. Peter Ozo-Eson, who spoke earlier in the week, also noted that proper investigation should be conducted before the release of the second tranche. Ozo-Eson said state governments that made judicious use of the first tranche of the refund should receive the second tranche.
A former governor of Kaduna State, Col. Abubakar Umar (retd.) also expressed a similar view on the issue. Umar had in a statement he issued in Abuja last Monday, said: “It is now revealed that some state governors contracted consultants with fees ranging from 10 to 30 per cent to secure refund from the Federal Government of Nigeria. With this shocking revelation, President Muhammadu Buhari should suspend his order to the Federal Ministry of Finance and the CBN for the release of the second tranche of the refund.
“It is also evident now that most of the earlier released funds were deployed for other purposes than payment of salaries and pension arrears as directed by Mr. President. This impunity has got to stop.”
But the National Chairman of the United Progressive Party (UPP) and former presidential candidate, Chief Chekwas Okorie, who also spoke with Sunday Sun on the issue, believes the Federal Government should go after states that fail to give satisfactory accounts of how they disbursed the previous release instead of withholding the money.
“The money is an entitlement of the states. But at the same time, the government has a right to monitor the expenditure. While they ask for the expenditure of the previous allocation, they will not have any good reason to withhold their entitlements under the guise of demanding for accountability. Of course, there are governors who are abusing their privilege. They can go after those ones if they don’t have satisfactory account of how they disbursed the previous release. But I will not support withholding the money on account of non-accountability,” Okorie said.
Nevertheless, the EFCC was recently reported to be investigating seven governors over the payment of N19 billion out of the N522 billion into their accounts. But the allegation has been debunked by the Nigeria Governors’ Forum (NGF), which described the reports as “not only preposterous but mischievous”, adding that “none of the reports were able to identify a single governor, not to talk of seven”. Another report had also alleged that a governor in one of the North-central states paid N2.5 billion out of the first batch of payments made to the state to his political benefactor, who is a top official of the Federal Government. The allegation has also been denied. But it was gathered that the EFCC was still investigating all allegations relating to the fund.
Notwithstanding, the Federal Ministry of Finance last Monday listed fresh conditions for further release of the refund to states. The ministry said it was doubtful if most governors fulfilled the earlier conditions, as salaries and pensions were still being owed in many states. Although the Ministry’s suspicion in no way validated the fears of various stakeholders who had spoken on the issue, as investigations were still ongoing, it is a pointer that the release of the second tranche might not come as speedily as the President’s directive had suggested.
The Finance Minister, Mrs. Kemi Adeosun, who announced the fresh conditions that must be fulfilled before states get further payments, said the governors must dutifully account for the application of the first tranche receipts. Moreover, there would no longer be disbursement except the ongoing reconciliation between the Federal Government and the states on the balances of their accounts of the refund arising from the first tranche disbursements is concluded.
In a statement by her Media Assistant, Mr. Festus Akanbi, in Abuja, Adeosun had said an independent assessment of the compliance by the states was a key function of the ministry.
Adeosun explained: “It is standard practice in the Ministry of Finance to undertake an independent monitoring of compliance with the terms and conditions of funds released. This will be conducted in due course. In addition, Mr. President gave an express anticipatory approval for the release of up to 50 per cent of the claims of each state, pending final reconciliation. That reconciliation is undertaken by the Debt Management Office (DMO), Office of the Accountant General of the Federation (OAGF) and the relevant state governments. Accordingly, 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 release of the first tranche, representing up to 25 per cent of claims, being N522.7 billion commenced in December 2016. Disbursement 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 Federal Accounts Allocation Committee (FAAC), if the final reconciliation found that the amount paid under the anticipatory approval exceeded that due.
“To date, nine batches have been processed while some balances remain outstanding to the credit of some states. From 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 to them.”
Nevertheless, the governors have debunked the alleged diversion of the refund, while also explaining that nothing illegal was committed in the entire process leading to the final disbursement of the first tranche to the states.
Head of Media and Public Affairs of the Nigeria Governors’ Forum, Abdulrazaque Bello-Barkindo, in a recent statement, said the current crop of governors in the country deserve accolades and not vilification for persuading President Buhari to order the release of the funds to the states given that the process had been ongoing since 2005.
The statement read: “The Paris London Clubs loan refund has been on the cards since 2005. Successive state governors had tried to get reimbursement for the excess deductions from their states in the past but did not succeed. The failure resulted from a number of reasons, varying from one state to the other. It is therefore to the Nigeria Governors’ Forum’s credit that this set of governors was able to persuade President Muhammadu Buhari to authorise the release of the funds for disbursement to deserving states.
“President Buhari’s desire to reflate the economy at a time when states were insolvent and unable to pay salaries was why he acceded to the request by the current group of governors that the money be released to the states. It is true that there were conditions attached to the disbursements but these arose from the collective and voluntary resolution of the governors and not any draconian order from any quarters. It shows that the governors themselves are responsible, sensitive and compassionate enough to understand the plight of Nigerians that they govern and therefore work in the interest of their people.
“It is important to state that in approving the repayment, due process was diligently followed and each and every approving authority, including the Federal Ministry of Finance, the office of the Accountant General of the Federation, the Central Bank of Nigeria and the office of the Auditor General of the Federation as well as the National Assembly were duly informed from the beginning to the end of all the transactions. Nothing illegal was done and no monies was paid into the personal account of any Governor, legislator or top officials at any of the levels and arms of government in the country.”
It added: “This brings us to the issue of consultants who facilitated the process. Indeed, a number of consultants were saddled with the task of verifying the amounts due to each of the states. These consultants were recruited by the respective states but were eventually collapsed into a consortium of only a few, even though the others who did not make it to the final group were reimbursed according to their input.
“It may interest the readers that many more consultants throughout the country are still insisting that they did work on this same Paris-London Clubs repayments since a decade ago and that they are entitled to some compensation as well. Many of them had actually and verifiably done some work in the past and negotiated a fee of between 10 per cent and 30 per cent, with the different states that engaged them. It was therefore immoral and impossible to deny each their due, provided their input is verified and justified.
“It should be noted that if the Federal Government under the watch of President Buhari had found anything corrupt, illegal and unpatriotic about the payment or the utilisation of the first tranche of the Paris- London Clubs Fund repayment to states, it would not have approved the payment of the second tranche to the states. After all, we all know the unimpeachable level of commitment of President Muhammadu Buhari on the issues of transparency and accountability.”
As the issue unfolds, one thing that is clear now is that the second tranche of the refund would not come as soon as expected. The demand for accountability from the governors is gaining momentum and that would ultimately delay the process. But the workers appear to be more at home with a delayed release of the fund than an immediate disbursement that would not be in their interest.