The Federal Ministry of Finance yesterday gave States conditions on accessing funds from the $2.689 billion Paris Club refund approved for the 36 States of the Federation.
The Federal Ministry of Finance said the refund is subject to the States meeting salary obligations and other conditions.
A statement by the Director (Information), Hassan Dodo said “the salary and staff related arrears must be paid as a priority,” as well as “commitment to the commencement of the repayment of Budget Support Loans granted in 2016, to be made by all States.”
The statement also said the clearing of amounts due to the Presidential Fertiliser Initiative, and the “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.”
With this directive, the States still having backlog of salaries and pension liabilities might be shut out from the latest round of releases.
The statement noted that the issue of Paris Club loan over-deduction had been a long standing dispute between the Federal Government and the State Governments which dated back to the period of 1995 to 2002.
In response to the dispute, President Muhammadu Buhari directed that the claims should be formally and individually reconciled by the Debt Management Office (DMO), a process that began in November 2016.
The DMO led the reconciliation process under the supervision of the Federal Ministry of Finance. The final approval of $2.689 billion is subject to the above stated conditions.
“As an interim measure to alleviate the financial challenges of the States during the 2016 recession, the President had approved that 50 per cent the amounts claimed by states be paid to enable the states clear salary and pension arrears. This was released between 1st December, 2016 and 29th September, 2017,” it noted.