FAAC: $418m deductions suspended as FG, states plan to meet today

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There were strong indications on Wednesday that the federal and state governments had agreed to the suspension of the deduction of $418m Paris Club refunds from states and local governments’ accounts pending the determination of court cases on the issue.

The PUNCH learnt that following the agreement, which was reached between states’ officials and the Federal Ministry of Finance, the Federation Account Allocation Committee meeting, which ended in a deadlock last Friday, would now hold today (Thursday).

It was, however, not clear if the decision to suspend the deductions would affect the October revenue allocation, but it was gathered that the Federal Government had already issued promissory notes on the consultants’ pay.

The Ekiti State Commissioner for Finance, Akin Oyebode, confirmed in an interview with The PUNCH that the issue of deductions had been resolved.

The commissioner, who did not give details of the resolution, also confirmed that the FAAC would either meet on Wednesday or Thursday (today).

He also reiterated the demand of the states for the separation of the Office of the Accountant-General of the Federation from the Office of the Accountant-General of the Federal Government.

Last Friday’ FAAC meeting ended in a deadlock as a disagreement arose between the federal and state governments when the committee was informed by the Ministry of Finance that the deductions for the $418m from the local governments’ allocation had commenced in order to pay the consultants for the work they did on the Paris Club refund.

The country had in 2006 paid $12bn to get a $18bn debt write-off by the Paris Club of international creditors.

States and local governments that did not owe the Paris Club later asked for a refund when they realised that the payment was made directly from the revenue accruing to the entire federation.

There were reports that some consultants, who claimed a percentage of the refunds as payment for services they said they rendered to the states and local governments, went to court to demand their pay.

The Federal Government had negotiated an out-of-court settlement with the contractors and $418m was agreed on as the judgment debt.

But the Nigeria Governors’ Forum, which opposed the payment, approached the court to stop the implementation of the controversial agreement.

The Chairman of the Forum of Commissioners of Finance and Benue State Commissioner for Finance, David Olofu, had told The PUNCH on Monday that the sharing of the October revenue by the three tiers of government was suspended last Friday because of the deductions.

A top member of FAAC, who confided in The PUNCH on Wednesday, said, “Deductions will not be done until the conclusion of the court cases, but I don’t know what will happen to the October allocation on which deductions had been made.”

Oyebode also told one of our correspondents on Wednesday that the issue of deductions, which led to the delay in the monthly allocation to states from the Federation Account, had been resolved.

The Ekiti finance commissioner said, “The issue has been resolved. We (Federation Account Allocation Committee) expect to meet today (Wednesday) to adopt the communiqué. I believe that the meeting will hold today or latest tomorrow (Thursday).”

Oyebode, who declined comments on the content of the communiqué, said the allocation for October would be released.

deductions on our statement that were not previously discussed and agreed on. That is the principle of federation that we are upholding and defending. It is not an argument per se. It is just that it is a principle that the federating units should be upheld at all times.”

He added that an issue of concern was the need to have separate accountants-general for the federation and the Federal Government, noting, “The Office of the Accountant-General of the Federation is not the same as the Office of the Accountant-General of the Federal Government.

“We have argued that the offices should be separated. There should be an accountant-general for the Federal Government and an accountant-general for the federation, and not the present situation where the accountant-general of the federation is only responsible to the Minister of Finance.”

The commissioner gave an assurance that Ekiti State would pay October salaries to workers as scheduled, saying, “We will pay salaries. What is important is paying salaries.”

FG has seen reason why deductions can’t start now – Delta commissioner
The Delta State Commissioner for Finance, Mr Fidelis Tilije, stated in an interview with The PUNCH on Wednesday that the Federal Government had agreed that the deductions could not start now.

He said, “The Federal Government has seen reason why deductions cannot start now. For crying out loud, there are court processes that are ongoing. Why don’t we wait till the court processes are concluded before talking about deductions?

“The Federal Government has issued promissory notes. The judgment they are talking about is a high court judgment.”

Tilije allayed fears over the non-payment of October salaries by Delta State, saying, “We will manage, but we hope that whatever problem we have will be resolved this week.

“We are supposed to have a conclusive discussion today (Wednesday), but we are still waiting for the Federal Ministry of Finance to determine the time of the meeting. If we don’t hold the meeting today (Wednesday), we will hopefully hold it tomorrow (Thursday).”

The Osun State Commissioner for Finance, Bola Oyebamiji, told one of our correspondents that the state would not borrow to pay salaries.

He said the government would strategise and find a way round the issue to ensure that workers would not suffer.

“We are going to think outside the box as we normally do. We are not going to borrow, but we are going to find a way round the situation. We will strategise and see what we can do to ensure that our people do not suffer,” Oyebamiji stated.

Efforts made to get a response from the spokesperson for the Office of the Accountant-General of the Federation, Henshaw Ogubike, were unsuccessful as calls were not taken and messages delivered were not replied.

Source: The Punch

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