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FAAC Meeting Deadlocked as States, LGs Protest $418m Paris Refund Deductions While Case Still Undecided In Court


Governors of the 36 states under the Nigerian Governors Forum (NGF) are insisting that the pending cases between the states, ALGON and the Federal Government must first be decided before any deduction or payment is made to any of the parties.

This is coming soon after the last meeting of the Federation Account Allocation Committee (FAAC) for October 2021, held last Friday, was inconclusive as states and local governments resisted the commencement of deductions in relation to the $418 million judgement debt for “consultancy services,” with regard to the Paris Club Loans refund.

The Nigeria Governors’ Forum (NGF) objected to the execution of the judgement until full determination of on-going litigation on the subject matter. The governors insisted that the deductions were done without their knowledge.


Chairman, Forum of Commissioners for Finance of Nigeria, which represents state governments at the FAAC meeting, Mr. David Ilofu, signed the document.

Owing to the development, the monthly gathering was postponed to allow all pending issues to be sorted out.


The letter said, “The FAAC meeting for the month of October, 2021, held on Friday 22nd October 2021, to distribute revenue that has accrued to the federation (federal, state and local governments) was inconclusive.

“The October 2021 meeting, which was chaired by the permanent secretary on behalf of the honourable minister, received revenue performance reports from the revenue-generating agencies (Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Department of Petroleum Resources, Nigeria Custom Service, and Ministry of Mines and Mineral Development).

“These reports by the agencies and the revenue inflow analysis by the office of the Accountant General of the Federation for the month of October 2021 could not be adopted by the committee.

Members declined approval after consideration of the reports for the disbursement of the available revenue because of deduction on funds belonging to the local government councils in favour of some consultants for a $418,000,000.00 judgement debt for consultancy services with respect to Paris Club loans refund.”

The letter stated that based on available information, the deduction would continue for 10 years or 120 months, contrary to the provisions of Section 162 of the Constitution of the Federal Republic of Nigeria 1999, as amended.

The finance commissioners noted that NGF had objected to the execution of the judgement until full determination of current litigation on the subject matter.

The document added, “Commissioners for Finance representing states and local government councils did not have prior knowledge of the deduction and coming at a time when states and local governments are in dire straits, it will further worsen the fiscal position of these tiers of government.

“Consequent upon these, the meeting was adjourned to allow for further consultations and resolution of all the issues that had been previously raised by the Nigeria Governors’ Forum (NGF) regarding the assignment that gave rise to the claim and the judgement.”

The governors had in August written through their lawyer, Mr. Femi Falana, to the Federal Ministry of Finance, seeking a stay of execution of the judgements of the trial courts on the matter, pending the determination of all appeals. They argued that once an application for injunctive reliefs was pending in a court of law, parties were barred from engaging in any act that could foist a fait accompli on the court in respect of that application or action.

The FAAC committee is chaired by the Minister of Finance, Budget and National Planning, while Commissioners for Finance in the states are members, representing the 36 states and 774 local government councils.



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