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Seven states owe FG $301.2m

Posted by By ISAAC ANUMIHE, Abuja on 2006/07/26 | Views: 349 |

Seven states owe FG $301.2m


Seven states still owe Federal Government over $301.2 million three months after Nigeria has exited from Paris Club debt.....

Seven states still owe Federal Government over $301.2 million three months after Nigeria has exited from Paris Club debt. The amount is part of their external indebtedness to the outside world before the Paris Club deal, Their liabilities could not be liquidated even with the $12.1 billion taken from the excess crude oil.
The indebted states are Abia ,which owes $113,022,964 million; Imo, $16,449,148 million; Kogi, $16,932,698 million; Kwara,$23,879,662 million; Niger, $59,189,092 million; Osun ,$37,487,875 million and Plateau, $34,223,535 million.

Apart from Kaduna, Katsina and Nasarawa states that did not borrow from Paris Club, 20 others have completed paying their own debts.

Making the clarification in Abuja on Tuesday, the Minister of Finance, Mrs. Nenadi Esther Usman, said that when the debt relief was granted, Nigeria was told to pay $12.4 billion but “we ended up paying $12.1billion because of exchange rate fluctuation.”

According to her, the government had to withdraw money from the excess crude account, which belongs to the three tiers of government to offset the debt.
The Federal Government is deducting this money at source from the revenue accruing to the states from the Federation Account.

Some states have protested this, arguing that they were not in existence when the debts were incurred.
In October last year, Nigeria obtained an exceptional treatment from the Paris Club which cancelled part of its debt estimated at $18 billion (including a moratorium on interest) representing an overall cancellation of about 60 per cent of the entire sum – around $30 billion.

This debt treatment allowed the country to pay $12.4billion to the Paris Club, representing regularization of arrears of $6.3billion, plus a balance of $6.1billion to complete its exit from the debt trap.
A Central Bank of Nigeria (CBN) docment showed that deductions from the excess crude account labelled “commission” shows other unexplained withdrawals. Dates are given for every withdrawal made.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.