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Nigeria: Still On the U.S.$418 Million Palaver

There is need to deal with the issue once and for all For the past two years, the federal government and the 36 states have been embroiled in a legal controversy over the propriety of the $418 million Paris Club refund fees demanded by some consultants/contractors. In the latest of what has become a running scandal, the federal government is moving to block the redemption of about 62 promissory notes issued to these consultants purportedly engaged by the Nigeria Governors’ Forum (NGF) and the Association of Local Governments of Nigeria (ALGON).

The controversy started on 11th November 2021 when a letter by the then Minister of Finance, Budget and National Planning, Zainab Ahmed notified the 36 governors through the NGF of a plan to commence the deduction of $418 million from their monthly statutory allocations. The said amount represents what she described as the approved consultancy/service fees which were supposed to have been deducted at source by the federal government during the payment of the various tranches of the London/Paris Club refunds to states beginning from 2016.

The letter sparked an instant push-back from the NGF whose leadership argued that the states were not parties to any suit on the issue, hence not liable to any person or entity in any judgment debt being relied upon by the federal government. As a preemptive measure, the NGF also approached the court. While the case was pending at the Court of Appeal in Abuja, the NGF on 1st August 2022 petitioned President Muhammadu Buhari. In the letter signed by its chairman and former Governor of Ekiti State, Kayode Fayemi, the NGF alleged that the finance minister, and then Attorney General of the Federation and Minister of Justice, Abubakar Malami were making surreptitious moves to kick-start the payment of the controversial $418 million fees to the contractors.

Aside from highlighting the legal cases it had won on the issue, including at the Supreme Court, the NGF also made serious allegations against Ahmed and Malami, the two ministers at the centre of the controversy. One, according to the NGF, it appeared the allegiance of the two ministers in the contentious $418 million fees was with the contractors rather than the Nigerian people. Two, the ‘uncommon zeal and speed’ with which these two ministers were pursuing the cause of the four contractors was suspicious, describing the attempt to stampede the Federal Executive Council (FEC) to approve the payment as part of this plot.

Unfortunately, as weighty as the allegations against the two ministers were, President Buhari never instituted any measure to intervene on the issue before he left office in May this year. But many Nigerians have been concerned that such a huge amount of public money should be handed to some private individuals under suspicious circumstances. In the current suit, the federal government wants the court to, among others, issue an order of perpetual injunction restraining the defendants and their agents “from exercising any proprietary rights” over the promissory notes. The argument of the federal government is that the promissory notes issued to the consultants are invalid because they were charged on its assets whereas it has no business with the claimants.

However, the bigger issue is the lack of transparency and accountability that has for years trailed all previous efforts by the federal government to pay the contractors with whom it has no business. The NGF under Fayemi was persistent in calling out some principal officials of the Buhari administration, accusing them of underhand dealings in the attempts to pay off the $418 million to the consultants/contractors. The former president looked the other way. Now that a new administration is in place, a revisit of the issue is necessary. We therefore endorse the case instituted by the federal government.

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