Nigeria Governors Write FG over Alleged $418m Paris Funds Debt, Say Renewed Deduction Plan Unlawful

Nigeria’s 36 state governors in the country under the Nigeria Governors’ Forum (NGF) have again resisted fresh moves to commence the deduction of $418 million Paris Club refund allegedly owed four contractors from the federation account.

In a letter to the federal government through the Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, dated August 1, the governors maintained that any renewed plan to begin the process which is being challenged in the courts and for which the Supreme Court has made pronouncement, would be unconstitutional.

In the official communication signed by the Chairman of the NGF, Dr Kayode Fayemi, who also doubles as the outgoing Governor of Ekiti State, the governors noted that it would appear that the allegiance of the Attorney General of the Federation and Minister of Justice, Mr Abubakar Malami, SAN and the Minister of Finance, Mrs Zainab Ahmed, lies with the contractors rather than the Nigerian people.

The governors described as suspicious the uncommon zeal and speed with which the two ministers were pursuing the cause of the four contractors, explaining that the latest attempt to stampede the Federal Executive Council (FEC) to approve the payment was a surreptitious way of breaching the law.

“The attention of the NGF has been drawn to yet another attempt by the Attorney General of the Federation (AGF) and the Minister of Finance (HMF) to circumvent the law and the recent judgment 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.

“It would be recalled that an earlier approval of Mr. President under the instrumentality of the AGF and HMF to pay the said sum to the contractors through the issuance of promissory notes had met stiff resistance by the 36 state governors who approached the court for redress through their Attorneys-General.

“ The matter is currently pending on appeal at the Court of Appeal in Abuja for hearing,” the governors wrote.

Significantly, the governors stressed that while the appeal is pending, one of the contractors, who is a beneficiary of the promissory notes in the sum of $142,028,941.95, Riok Nigeria Limited, and who had lost at the Court of Appeal, further appealed to the Supreme Court, in suit no: SC 337/2018.

The forum affirmed that the Supreme Court on 3rd June, 2022 also dismissed Riok’s appeal as lacking in merit, recalling that the court had on the occasion made clear that neither the NGF nor the Association of Local Governments of Nigeria (ALGON) had power to award contracts and charge same directly to the federation account as done in the extant case.

Quoting page 43 of the judgement, the governors noted that the court had declared that funds belonging to a state or local government must be kept in an account belonging to the state or local government as the case may be, and disbursed or expended by the state strictly in the manner and for the purposes prescribed in the constitution.

In addition, they stressed that monies can only be spent on the basis of an appropriation law or as prescribed by the House of Assembly of the State and in the manner and for purposes prescribed in the constitution, a local government law or as prescribed by the council of the local government.

According to the governors, the dismissal of RIOK’S case by the court also affected the payment of $1,219,440.45 and $215,195.36 to two private lawyers to RIOK, Nwafor Orizu and Olaitan Bello who are also beneficiaries of promissory notes by the Debt Management Office (DMO).

Besides RIOK and the two lawyers, the NGF noted that the States had also challenged either on appeal or other courts the claims by the other contractors including: Dr. Ted Isighohi Edwards ($159,000,000), Ned Nwoko ($68,658,192.83) and Panic Alert Security Systems Ltd ($47,831,920).

“These cases are pending and no steps ought to be taken to enforce the Judgment and alter the status quo until the matters are fully determined. A caveat issued to restrain all parties concerned and the public from dealing or honouring promissory notes issued had earlier been published,” the NGF insisted.

The purport and essence of the definitive pronouncement by the Supreme Court, the NGF argued, is that none of the contractors recommended for payment of the sum of $418 million by the AGF and HMF can be so paid because the contracts and payments relied upon were not processed as prescribed by the constitution and the law.

Subsequently, they declared that the funds cannot be accessed through the federation account as vigorously pursued by the Malami and Ahmed, pointing out that the contracts as they stand, are unconstitutional and unlawful and cannot vest any legal right on any of the contractors.

The governors maintained that it was immaterial that part of the contract sums had been paid, explaining they the payments did not validate the unlawful nature of the contracts. “The Supreme Court has spoken. It is final and must be obeyed,” the forum noted.

“The NGF therefore urges that the AGF and the HMF should not under any guise whatsoever stampede the FEC to take a decision which will not only be patently unconstitutional and illegal but also an affront to the highest court of the land.

“The rule of law is not only supreme; it is a cardinal principle canvassed by the present administration and should in this particular occasion be strictly obeyed.

“In the face of the crushing economic realities and security challenges facing the nation and competing allocation of scarce resources, the payment of contractors of the humongous sum of $418 million from pubic treasury is not and should not be the priority of FEC.

“FEC may also wish to note that the undue haste in which the payment of the contractors in the Paris Club refund has been pursued and processed by the AGF and HMF has already created the impression in the discerning minds of the public that it would appear that the interest of contractors takes precedence over and above the welfare and interest of the general public whom the senior officials of government had sworn to defend and protect,” the governors said.

The NGF therefore admonished FEC to prevail on the AGF and the minister of finance to toe the line of constitutionality and allow the due process of the law to prevail.

Emmanuel Addeh

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