President Buhari issues 10-point memo on Paris Club refund

President Muhammadu Buhari has released more clarification on the issue of the Paris club refund on his official Facebook page. gistlite.com recently reported when the president ordered the release of about N522.74 billion to all 36 states in the first tranche of the Paris Club refund in December 2016. The federal government later released the sum of N388.304 billion out of the N522.74 billion. 

The funds were released following protests by states against over deductions for external debt service between 1995 and 2002. On Sunday March 26, the Presidency revealed the following clarification of the Paris Club refund, below is the memo released: RE: Paris Club Refunds to State Governments We would like to make clarifications regarding the first tranche of Paris Club Refunds to State Governments, as follows: 

1. An initial tranche of disbursements was directed by President Muhammadu Buhari in December 2016. 

2. The release of that initial tranche commenced in December 2016, and is ongoing. 

3. That initial tranche represents up to 25% of claims by the States, and was approved by President Muhammadu Buhari largely to enable the States pay outstanding salaries and pensions. 

4. Disbursement was in fact subject to an agreement by States that 50% of any amount received would be used to pay salaries and pensions. READ ALSO: Governors deny diverting Paris Club refunds 

5. As previously communicated by the Ministry of Finance, the initial disbursement is taking place alongside a reconciliation process by the Debt Management Office (DMO), Office of the Accountant General of the Federation (OAGF) and the relevant State Governments. 

6. This crucial reconciliation process is required on account of the fact that the deductions necessitating the claims for refunds by the States occurred prior to 2005; long before this administration took office. 

7. The reconciliation will establish exactly how much each State is owed, and how much is outstanding following the initial tranche of payments which commenced in December 2016. 

8. BECAUSE THE TRANCHE 1 DISBURSEMENTS ARE BEING MADE IN BATCHES, THE FIGURES RELEASED SO FAR BY THE FEDERAL GOVERNMENT AS HAVING BEING PAID TO THE STATES ARE NOT FINAL, AND WILL THEREFORE BE REGULARLY UPDATED TO REFLECT THIS. 

9. A further update on amounts disbursed to each State Government will be published by the first week of April 2017.
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10. The overriding consideration for the release of any further Tranches will be: 
(a) the current and projected cash flows of the Federation; 
(b) the outcome of the independent monitoring of the compliance with terms and conditions attached to the previous releases; 
(c) the completion of the reconciliation process. Meanwhile, Governor Nyesom Wike of Rivers state has cried out that the federal government underpaid his state in the first tranche of Paris Club refund to states. This comes even as the governor dismissed insinuations that the state squandered what it got from the first tranche of refunds to states.