Nigerian governors tackle FG over $418 million Paris Club deductions

Governors of Nigerian states under the umbrella of Nigeria Governors’ Forum (NGF) have again resisted attempts to commence the deduction of $418 million Paris Club refund allegedly owed four contractors from the federation account.

The governors in a letter to the federal government through the Secretary to the Government of the Federation (SGF), Boss Mustapha, argued that an attempt to restart the deduction process, which is being challenged in the courts and for which the Supreme Court has made pronouncement, would be unconstitutional.

The letter, signed by the Chairman of the NGF and outgoing governor of Ekiti State, Kayode Fayemi, described the new move as an “attempt by the Attorney General of the Federation (AGF) and the Minister of Finance (HMF) to circumvent the law and the recent judgement of the Supreme Court by surreptitiously securing the approval of the FEC to effect payment of the sum of $418 million to four contractors who allegedly executed contracts in respect of the Paris Club refunds to the states and local governments.”

An approval of President Muhammadu Buhari under the instrumentality of the AGF, Abubakar Malami, and Finance Minister, Zainab Ahmed, to pay the said sum to the contractors through the issuance of promissory notes, had met stiff resistance from the 36 state governors who approached the court for redress through their Attorneys-General.

Pending Matter

The governors argued that the matter is currently pending on appeal at the Court of Appeal in Abuja for hearing, adding that the Nigerian government should exercise restraint in its handling of the matter.

“Significantly, while that appeal is pending, one of the contractors, who is a beneficiary of the Promissory Notes in the sum of $USD 142,028,941.95, Riok Nigeria Limited and who had lost at the Court of Appeal, further appealed to the SC in SUIT NO: SC 337/2018 BETWEEN: RIOK NIGERIA LIMITED V INCORPORATED TRUSTEES OF NIGERIA GOVERNORS’ FORUM &7 ORS. The Supreme Court on 3rd June, 2022 also dismissed Riok’s appeal as lacking in merit,” the NGF said.

The governors argued that the Supreme Court had on the occasion made clear that neither the NGF nor ALGON had power to award contracts and charge the same directly to the Federation Account as done in this case.

“The dismissal of RIOK’S case by the SC also affected the payment of $1,219,440.45 and $215,195.36 to two private lawyers to RIOK, NWAFOR ORIZU and OLAITAN BELLO who are also beneficiaries of Promissory Notes by the DMO,” the letter said.

“Besides RIOK and the two lawyers, the States have also challenged either on appeal or other courts the claims by the other contractors including: DR. TED ISIGHOHI EDWARDS ($159,000,000), NED NWOKO ($68,658,192.83) and PANIC ALERT SECURITY SYSTEMS LTD ($47,831,920). These cases are pending and no steps ought to be taken to enforce the Judgment and alter the status quo until the matters are fully determined. A Caveat issued to restrain all parties concerned and the public from dealing or honoring Promissory Notes issued had earlier been published.”

The governors said that the purport and essence of the definitive pronouncement by the Supreme Court is that none of the contractors recommended for payment of the sum of $418 Million by the AGF and finance minister can be so paid because the contracts and payments relied upon were not processed as prescribed by the Constitution and the law.

“The funds certainly cannot be accessed through the Federation Account as vigorously pursued by the AGF and HMF. Those contracts as they stand are unconstitutional and unlawful and cannot vest any legal right on any of the contractors. It is immaterial that part of the contract sums has been paid.

“Those payments did not validate the unlawful nature of the contracts. The SC has spoken. It is final and must be obeyed. The excerpt of the decision of the SC is attached for ease of reference,” the governors argued.

Long-running battle

The NGF said it had consistently posited that neither the States nor ALGON can appropriate or deduct monies directly from the Federation Account which funds are meant to be paid into the States/Local Government Joint Account for which the Houses of Assembly of the states are yet to appropriate and arising from judgments to which the states that are custodians of the joint account were not a party.

The position, it argued, has been reinforced by the recent supreme court decision in the RIOK’s Case.

“The NGF therefore urges that the AGF and the HMF should not under any guise whatsoever stampede the FEC to take a decision which will not only be patently unconstitutional and illegal but also an affront to the highest court of the land. The rule of law is not only supreme; it is a cardinal principle canvassed by the present administration and should in this particular occasion be strictly obeyed,” the letter said.

“In the face of the crushing economic realities and security challenges facing the nation and competing allocation of scarce resources, the payment of contractors of the humongous sum of $418 Million from public treasury is not and should not be the priority of FEC.

“FEC may also wish to note that the undue haste in which the payment of the contractors in the Paris Club refund has been pursued and processed by the AGF and HMF has already created the impression in the discerning minds of the public that it would appear that the interest of contractors takes precedence over and above the welfare and interest of the general public whom the senior officials of government had sworn to defend and protect.

“The NGF therefore admonishes FEC to prevail on the AGF and HMF to toe the line of constitutionality and allow the due process of the law to prevail.”