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| President Buhari |
President Muhammadu Buhari has approved the disbursement of N522.74 billion to states as reimbursement for over-deductions on external debt service.
The first tranche of N153.01 billion out of the total sum is currently being processed for release to 14 states as early as next week.
The Ministry of Finance said state governments had submitted to the federal government claims of over-deductions for external debt service arising between 1995 and 2002 as a result of allocations on First Line Charge deductions from the Federation Account Allocation Committee (FAAC).
A statement issued by Festus Akanbi, media aide to the Minister of Finance, Mrs. Kemi Adeosun, said the debt service deductions were in respect of the Paris Club, London Club and multilateral debts of the federal and state governments.
“While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.
“On the request by state governments for a refund of amounts owed by the federal government, Mr. President directed that claims be subject to verification by the Debt Management Office and a team was established and given the mandate to scrutinise claims and reconcile with available records.
“The brief for the team was also extended to include a review of interim payments made under previous administrations.
“Work has commenced to resolve each state government’s claim and the exercise is expected to take approximately 12 months. The exercise will be thorough, including a complete reconstruction of records dating back to the period in question,” the statement said.
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