States may get stranded amid allocation row with FG

Governors reject September allocation
An alleged row between the Federal Government and states over deductions from the Federation Account may result in many states not being able to pay salary this month.

Chairman of the Nigeria Governors Forum (NGF) Dr. Kayode Fayemi indicated yesterday that governors are dissatisfied with the September allocation.

He said: “We are dealing with the issue. We would find a resolution to it. As far as states are concerned, they do not accept that funds belonging to Federation Account could just be arbitrarily deducted without the input of the states, and that’s why we are insisting that until this is clarified, we would rather leave the money in the pool until we have all agreed on the direction.”

The issue is the commencement of deduction of the consultant fees from the September allocation in the Federation Account.

The consultant fee is believed to be $416 million, which is a percentage of the Paris Club loan refund that they assisted the states to get back from the Federal Government after the states overpaid.

Checkout Magazine gathered that some years back, states had unified under the Nigerian Governors’ Forum to hire consultants to recover their overpaid remittance of the Paris Club debt to the Federal Government

As such, the consultants also unified to file a suit to recover the money from the Federal Government. But, upon winning the case, the states failed to pay consultancy fees.

The consultants filed a suit against the states and the federal government. When judgement was delivered, it was in favour of the consultants. The state government did not appeal the judgement until the period for appeal elapsed.

Thereafter, the consultants approached the Ministry of Finance to be paid directly from the FAAC allocations to the state governments the agreed percentage of the total sum agreed upon between the states and the consultants.



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