The Federal Government of Nigeria has been issued a stern warning by the state governments to desist from deducting funds accruing to them and all local government councils as liquidation for the alleged $418 million London/Paris Club loan refund-related judgment debts.
The state governments maintained that they had no hand in any suit on the London/Paris Club refund, hence, were not liable to any person or entity in any judgment debt being relied on by the federal government.
Part of the letter to the FG, dated April 4 reads:
“Their Excellencies have drawn our attention to your letter referenced above, which the various states of the federation received at about the end of March 2022. The letter notifies the states of your intention to commence deduction from allocations due to the states from the Federation Account for the liquidation of the London/Paris Club Loan refund-related judgment debts on behalf of the 36 States of the federation and the 774 local government councils.”
“Please note that the states of the federation were not parties to any contract or suits concerning the London/Paris Club refund, from which the said judgement debts arose. Consequently, the 36 states of the federation are not liable to any person or entity in any judgment debt.”
The Body of Attorneys-General of the Federation, through which the states spoke, further warned against the Federal Government’s intention to proceed with any deductions, as it would be illegal and in contempt of the states’ appeal challenging the judgement.
“The appeal challenges the Federal High Court’s (per Justice I.E. Ekwo) judgement delivered on March 25, 2022, in Suit No: FHC/ABJ/CS/1313/2021 between A.G Abia State v. President, Federal Republic of Nigeria & 42 Ors. Therefore, the issue is sub judice.
“The law requires you to restrain from taking any step, whatsoever, that is capable of interfering with the res of the suit, which is now a subject of an appeal.
“Accordingly, Nigerian case law enjoins you to refrain from effecting any deduction whatsoever, from the allocations due to the 36 States from the Federation Account for the liquidation of the London/Paris Club Loan refund-related judgment debts purportedly on behalf of the 36 States of the Federation and the 774 LGAs, pending the hearing and determination of the appeal by the States of the Federation. Doing otherwise, in the face of the pending appeal and motion on notice for injunction pending appeal shall be at your peril.”
On November 11, 2021 the Minister of Finance, Budget and National Planning, in a letter, advertised the commencement of the deduction for the liquidation of the alleged judgment debts.