FG Disburses N243b Paris Club Refund to States

July 19, 2017
FG Disburses N243b Paris Club Refund to States

FG Disburses N243b Paris Club Refund to States

By Modupe Gbadeyanka

Another tranche of N243 billion Paris Club Refunds has been released to states of the federation, majorly for the payment of salaries and pension.

A statement from the Ministry of Finance on Tuesday explained that the payment was made to the 36 states and the Federal Capital Territory upon the approval of the President on May 4, 2017, in partial settlement of long-standing claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.

Minister of Finance, Mrs Kemi Adeosun, noted that the debt service deduction was in respect of the Paris Club, London Club and Multilateral debts of the FG and states.

While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.

The funds were released to state governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers.

The release was conditional upon a minimum of 75 percent being applied to the payment of workers’ salaries and pensions for states that owe salaries and pension.

The Federal Ministry of Finance said it was reviewing the impact of these releases on the level of arrears owed by state governments.

A detailed report, according to the statement, is being compiled for presentation to the Acting President, Professor Yemi Osinbajo, as part of the process for approval for the release of any subsequent tranches.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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