Payment of salaries by about 33 states of the federation is uncertain as the decision of the federal government to debit local government accounts in commencement of a payment of $418 million (N172 billion) to private consultants on Paris Cub refund has pitched states and local governments against it (FG).
BudgIT, a civic group committed to government financial transparency, in its report, ‘State of States 2019’, said only three Nigerian state governments (Lagos, Rivers and Akwa Ibom) can finance their recurrent expenditure without allocation from the federal government.
There had been pressure from the Nigeria Governors Forum (NGF) and the general public to stop the suspicious payments to the consultants.
However, in a dramatic twist, less than a month after a directive by President Muhammadu Buhari,, the Ministry of Finance, Budget and National Planning has commenced deductions to pay the claimants.
The permanent secretary, Federal Ministry of Finance, told the Federation Account Allocation Committee (FAAC) meeting on Friday that it has commenced the deductions to pay the consultants.
This information has irked the states which then refused to consider the revenue for the month of October 2021 until the FG comes clean with the deductions.
In 2006, the federal government paid $12 billion to get an $18 billion debt write-off by the Paris Club of international creditors.
However, because the payment was made directly from the revenue accruing to the entire federation, states and LGAs that did not owe the Paris Club asked the federal government for a refund.
Some consultants had surfaced along the line to claim a percentage of the refunds as payment for their purported services to the states and LGAs.
Some contractors also claimed they were asked to execute projects across the country by the Association of Local Governments of Nigeria (ALGON).
Questions were, however, asked on why states would need consultants to negotiate with the federal government over the refund, while the projects said to have been awarded by ALGON turned out to be mostly non-existent.
The governors had asked for a forensic audit.
While the contractors and consultants went to court, the Attorney General, Abubakar Malami, negotiated an out-of-court settlement with them and agreed to pay $418 million as judgment debt.
Meanwhile, despite opposition by the governors and activists, President Buhari went ahead to approve the payments.
