FG released another N516 bn to State Governors as second tranche of PCR

shakirudeen taiwo

June 12, 2017 12:10 PM

In November 2016, a sum of N522.74 billion was paid as the first tranches to the state governors with the condition that over 50% of the fund would be used to settle outstanding salaries and pensions arrears owed civil servants in these states.

Nigeria's Finance Minister,Kemi Adeosun

The Federal Government has released N516.38 billion as the second tranche of the Paris Club refunds to the State Governors, following the approval of disbursement by President Muhammadu Buhari in November 2016.

The Paris club refunds are payments of over deductions made from their Federal Account Allocation Committee (FAAC) to settle accumulated external debts from 1995-2002. It would be recalled that in 2005 Nigeria government reached an agreement to pay off $12 billion in exchange for total debts cancellation by the Club. In this process, some states were overcharged.

According to a statement released in Abuja on Friday, June 9, 2017, by the Director of Information, Federal Ministry of Finance, Mr Salisu Na’Inna noted that the debt service deductions for which refunds have been made were in respect of the Paris Club, London Club and Multilateral debts of the FG and States.

“The funds were released to state governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers.

“The releases were conditional upon a minimum of 50 percent is applied to the payment of workers’ salaries and pensions. The Federal Ministry of Finance is reviewing the impact of these releases on the level of arrears owed by state governments.

“A detailed report is being compiled for presentation to the Acting President, Professor Yemi Osinbajo, as part of the process for approval for the release of any subsequent tranches.

Due to the controversies that greeted the first tranche released, the Federal Government has been reluctant to release this tranche, but mounting pressure from the governors and some using the non-release as reasons for under-performing made the Federal Government yield to their demand.

shakirudeen taiwo

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