Without doubt, few issues have generated heated debate and controversy in the last couple of days like the $418 million Paris Club paid to consultants/contractors for their role in the refund process. Although issues surrounding the payment have been lingering for long, it took the front burner recently, following the opposition to it by Governors and the Association of Local Governments of Nigeria (ALGON).
President Muhammadu had given a directive for the settlement of liabilities owed to different categories of judgment creditors arising from litigation against either the federal, state or local governments.
There is the Paris Club Refund related debts that deals with debts incurred by states and local governments following their engagements of consultants and contractors to recover funds arising from the debt relief and execute some projects respectively.
Similarly, there are also ‘top priority’ debts involving liabilities incurred by the federal government, ministries, departments and agencies (MDAs) because of judgements against them. This category is considered top priority because the nation risks losing some critical assets in enforcement proceedings.
Among those waiting to be paid are Riok Nigeria Limited, $150m, for constructing boreholes for 774 local governments; Ned Nwoko Solicitors, $68m, for consultancy work for states; Kayode Ajulo & Co, N900m, for the legal services provided a faction of Nigerian Governors Forum (NGF) and Riverdale Financial Services Ltd, N12.9bn, for consultancy services engaged by eight states.
Others include Allied Plus Consulting & Logistics Limited/Azinge & Azinge, N4.2bn for consultancy services rendered to Bayelsa State and Balsa A.B.S. Nigeria Limited/Azinge & Azinge, N2, 024,567,441.15, for financial consultancy provided Kebbi State. There is also Panic Alert System, $47.8m, for consultancy services rendered to a faction of NGF; Nipal Consulting Network/Njemanze & Njemanze, $6.9m for services provided to ALGON and Ted Edward, $167m.
For instance, payments owed to Ned Nwoko, which is for the consultancy services he rendered culminating in the refund to states and local governments, are supposed to be through the Paris Club Refund.
We recall that in 2006, the federal government paid $12 billion to get an $18 billion debt write-off in a Paris Club Debt buy back deal. Of course, the federal government paid the money from the federation account belonging to the three tiers of government and since no local government owed foreign debts with many states owing no such debts, using funds belonging to all to settle the debt was unjust.
Not surprisingly, therefore, some state governments and ALGON hired the services of Ned Nwoko to explore all legal means possible and ensure refund of the illegal deductions since they don’t owe foreign debts.
Nwoko in 2008 went to court against the federal government and in December 2013, got judgement at the federal high court in Abuja which affirmed that the federal government utilisation of the federation account for the debt buy back without approval of states and local government contravenes the 1999 constitution.
The court also ordered the federal government to pay the sum of over $3bn to the local governments and deduct 20 per cent of the judgement sum being the agreed amount, for Nwoko’s consultancy services.
It is trite to argue that since the states and LGs hired the services of Nwoko on the strength of which he dragged the federal government to court and got judgement, there is the need to ensure his fees are paid. The payment along with that of other judgement creditors is generating controversy with the Nigerian Governors’ Forum asking for a forensic audit.
As a newspaper, we believe that the call for forensic auditing is not out of place. However, an independent body should handle such and before commencing it, NGF and ALGON should deposit the fund at a separate bank account monitored by a court of competent jurisdiction, pending the outcome of the audit.
Importantly too, there is the need to treat the judgement creditors separately rather than lumping them together because doing so as is currently the case, has the tendency to befuddle the matter. While the services supposedly rendered by some of these contractors/consultants may appear cloudy, it is clear that some indeed rendered the services. There is no reason whatsoever to deny them the payment as doing so amounts to clear breach of agreement.
Without prejudice to the subsisting litigation, we urge the President to intervene and resolve this matter to save the nation the risk of losing critical assets through enforcement proceedings.