$418 Million Paris Club Fee: Malami tackles governors, says deductions justified

August 11, 2022
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Nigeria’s Attorney General and Minister of Justice, Abubakar Malami, on Thursday said that the Nigerian Governors’ Forum (NGF) had no basis to reject the proposed deductions of $418 million from the Paris Club refund.

Mr Malami told journalists at the State House Ministerial Briefing that the governors originally created the liability whose payment they had also indemnified, therefore all the “noise making that is now being generated arising from the Governors forum” is unjustified.

PREMIUM TIMES exclusively reported earlier in the week that President Muhammadu Buhari directed the Minister of Finance, Zainab Ahmed, to suspend plans to begin the deduction of the $418 million Paris Club refund allegedly owed the consultants from the federation account.

Sources privy to details of the Executive Council of the Federation’s deliberations told this newspaper that the president gave the directive at the FEC meeting of August 3, where the matter was extensively discussed.

Governors of Nigerian states under the umbrella of the Nigeria Governors’ Forum (NGF) had last week resisted attempts to commence the deduction plan. 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 a 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), Abubakar Malami, 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.”

Malami Speaks

On Thursday, Mr Malami argued that his office had not incurred any major judgement since he assumed office, adding that the Paris club deduction controversy precedes his appointment as minister.

He said: “I think you need to be informed first, as to the antecedents, prevailing circumstances and how the liability arose but one thing I’m happy to state, which I want to reiterate having stated same earlier, is the fact that the Office of the Attorney General and the government of President Muhammadu Buhari has not indeed incurred any major judgment debt for the period of seven years it has been on.


“Now, coming to the antecedent background of the Paris Club. The liability or judgement debts related to Paris Club was indeed a liability created by the governor’s forum in their own right.

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“How do I mean? The Governor’s forum comprising of all the governors sat down (and) commonly agreed on the engagement of consultant to provide certain services for them relating to the recovery of the Paris Club. So, it was the governor’s forum under the federal government in the first place that engaged the consultant.”

Speaking further, the minister said that when successes were recorded in the refund process, the governors “collectively and individually presented a request to the federal government for the fund and among the components of the claim presented for the consideration of the federal government was the payment of these consultants that are now constituting the subject of contention.”

“So the implication of that is that the governors in their own right recognized the consultant(s), recognized their claim and presented such claim to the federal government,” he said.

“Three, when the claims were eventually processed and paid to the governor’s forum. They indeed on their own, without the intervention of the federal government took steps to make part payments to the consultants, acknowledging their liability over same.

“And then four, when eventually they made such payments at a point, they took a decision to stop the payment. The consultants instituted an action in court against the Governors Forum. And what happened in court? They submitted to consent judgment. They asked and urged the court to allow them settle out of court. The court granted them an opportunity to settle. They commit(ed) terms of settlement in writing, they signed the terms of settlement, agreeing and conceding that such payments be made to the consultant.

“And then five, thereafter, the federal government under the administration of President Muhammadu Buhari was requested to comply with the judgment and effect payment. The President passed all the requests to the Office of the Attorney General for consideration. I suggested to the President on the face value of the judgment and the undertones associated with the consultancy services. It was my opinion, the same treatment we meted to P&ID, that let us subject this claim, the consent judgment, to investigation by the agencies of the government.”

Mr Malami claimed that the president approved and he directed the EFCC and DSS to look into the claims and report back to his office, adding that the agencies reported and concluded that there are no problem undertone associated with it.

Mr Malami said that along the line, there was a change of leadership of the governors forum, and that was the genesis of the furore over the planned deductions.

“And all the noise making that is now being generated arising from the Governors forum is not only unjustified, but indeed, a clear case of absence of defense,” he said.

Controversies

President Buhari had initially approved the payment of the money to the contractors through the issuance of promissory notes, based on proposals by the Attorney General of the Federation, Mr Malami, and the Minister of Finance, Zainab Ahmed.

The plan was, however, fiercely resisted by the 36 state governors who approached the court for redress through their attorneys-general. The governors argued that the matter was on appeal at the Court of Appeal in Abuja, 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 the power to award contracts and charge the same directly to the Federation Account as done in the case.


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