By Nse Anthony-Uko
ABUJA, (Sundiata Post) — The federal government on Friday, released a breakdown of the first tranche of Paris Club refunds paid to states to date.
The payments, totalling N516.38 billion, were made to the 36 states and the Federal Capital Territory upon the approval of President Muhammadu Buhari on November 21 2016, a statement by Salisu Danbatta, director of information in the Ministry of Finance said.
The payments were made in partial settlement of long sanding 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.
These debt service deductions are 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 releases were conditional upon a minimum of 50 per cent being applied to the payment of workers’ salaries and pensions. The Federal Ministry of Finance is reviewing the impact of these releases on the level of arrears owed by State Governments.
A detailed report 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.