Court orders Zamfara Govt. to settle bank's N3.1bn facility

Justice Okon Abang of a Federal High Court, Lagos, on Wednesday ordered Zamfara Government to pay Ecobank Nigeria N3.1 billion it owed the bank.

Abang gave the order while delivering judgment in a suit filed by Ecobank Nigeria against Zamfara Government.

Other defendants in the suit are the State Attorney-General, State Ministry of Finance, Accountant-General of the Federation; Attorney-General of the Federation and the Central Bank of Nigeria.

Abang also ordered Zamfara to pay 30 percent interest on the sum per annum from March 1, 2013 when the suit was filed till date.

He added that the state must pay 10 per cent interest on the judgment sum until it was finally liquidated.

He, however, awarded N50, 000 cost to the bank.

Abang directed the defendants to ensure that the judgment was ``fully and effectively complied with.’’

The judge held that the sum of N3.15 billion was the outstanding indebtedness on the N1.5 billion facility granted Zamfara by Oceanic Bank which was consolidated with Ecobank.

Ecobank had through its claim told the court that Zamfara Executive Council passed a resolution authorising its finance ministry to accept the loan on behalf of the state.

The statement of claims stated that the major security for the disbursement of the facility was a conditional Irrevocable Standing Payment Order (ISPO) from the state's Value Added Tax (VAT) account domiciled with Gusau branch of First Bank.

Ecobank had said the facility suffered a setback when First Bank "stopped the warehousing of the funds from the Federation Account Allocation Committee (FAAC) and consequently declined further remittance for the payment of the indebtedness.

The claim also stated that an agreement was subsequently reached to restructure the debt in November 2010 after which the state "honoured rentals for few months."

However, the rentals till date have not been paid by Zamfara even after the rentals were due.

Ecobank, however, said the refusal to settle the debt was injurious to its business as the custodian of third party funds.