How is the FG managing the disbursement of Paris Club refunds to States?

The Federal Government under President Buhari’s leadership has consistently assured of its dedication to alleviating the difficult conditions of living that Nigerians everywhere have to deal with daily especially with the recession that frustrates efforts of the most ordinary citizens.

It does not help that only Lagos State can be safely said to have the ability to cater to her own people without complete reliance on the allocations from the federal government. The resultant effect is that many civil servants working with the States have been working without the guarantee of regular pay or even none at all for several months.

As a form of bail out from this situation, the Federal Government has been working on disbursement of funds from the recovered London-Paris Club refunds to States in addition to the fast-tracked NLNG bailouts made earlier on to help them stay afloat especially with the payment of workers’ salaries and pensioners’ stipends.

As with all things Nigerian though, that process has been shrouded in so much secrecy that a State Governor has had to travel to Abuja to demand answers from the Ministry of Finance (the Ministry in charge of the disbursements) why his State was yet to be paid almost two months after they had announced that payments had been made.

After the President announced last week that he’d ordered the disbursement of the second tranche of payment from the refunds, the reactions were mixed – many Nigerians were happy while others had doubts that it was wise to give them States more funds when there are allegations that the first tranche had been squandered by the Governors.

It became necessary for the Federal government to defend its decision. And they did via the Federal Ministry of Finance handle on Twitter. The only problem is that no one has told them yet that you do not have the time for a 26-part tweet.

Thankfully, we are here.

Apparently, the sole aim of the disbursement is to ensure that the State Governments can pay salaries. Actually, the exact words used by the Ministry to describe the goal of the process are: “the attainment of specific economic objectives”

However because this administration is bent on dissociating itself as much as possible from those that came before it, the Debt Management Office(DMO)  of the Ministry wanted to spend 1 year and 10 months reconciling its books to clear all the claims of over deductions made to the Federal Government dating as far back as 2005. All that before beginning the disbursement process. Can you imagine the wait?

So President Buhari said no! Instead, he granted the DMO 12 months to complete its reconciliation and in the meantime, also granted an “express Anticipatory Approval for the release of up to half of the claims of each State to them during those 12 months. Which is why they have already started making payments but only in batches and when the claims of each State have been “reconciled with the facts at the disposal of the Federal Government”. Which should not necessarily be a big deal, right?

Except there is another problem…

The Ministry then found that some States had already been paid in full or in part under previous administrations and so the DMO has another reconciliation to deal with. Good news is that they started the disbursement anyway. The first tranche started in December 2016 and States who have submitted claims and whose claims have been reconciled with the facts at the disposal of the Federal Government have started receiving up 25% of their claims subject to the undertaking that monies received would be used for the payment of “salaries and pensions”.

They have also got the Governors to agree to refund any excess payments if the DMO finds that the monies they have received exceed the amount due to them.

Another reconciliation…

The Ministry has a procedure where they conduct independent monitoring of compliance with whatever terms these governors have agreed to and while that has not started yet, they have continued to disburse the monies.

Surely, with all these red-taped measures nothing should slip past the reconciling eyes of the Ministry. We’ll know for sure once the final figures are released after each state and the FG have reconciled the sums due.

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