FG Explains Paris Club Refund to States

The Federal Ministry of Finance has provided further details on the Paris Club Refund approved for the 36 states of the federation by the Federal Government.

In a statement signed by Hassan Dodo, Director of Information in the ministry, government explained that as an interim measure to alleviate the financial challenges of the states during the 2016 recession, the President had approved that 50% of the amounts claimed by states be paid to enable them clear salary and pension arrears.

The statement recalled that the approved sums were released between 1st December 2016 and 29th September 2017 as part of government’s fiscal stimulus to ensure the financial health of the states.

It explained that the DMO led the reconciliation process under the supervision of the Federal Ministry of Finance. The final approval of US$2.689 billion is subject to the following conditions:
(i) Salary and staff related arrears must be paid as a priority;
(ii) Commitment to the commencement of the repayment of Budget Support Loans granted in 2016, to be made by all States;
(iii) Clearing of amounts due to the Presidential Fertiliser Initiative,
(iv) Commitment to clear matching grants from the Universal Basic Education Commission (UBEC) where some States have available funds which could be used to improve primary education and learning outcomes.

Government also stated that the payment of the approved amount is to be made in phased tranches to the States.

The issue of Paris Club loan over-deduction had been a long standing dispute between the Federal and State Governments dating back to the period of 1995 to 2002.

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