There are strong indications that five states may get the highest allocation out of the N649.43bn expected to be paid by the Federal Government to state governments from the final tranche of the Paris Club loan refund.
The states, according to investigations by our correspondent, are Akwa Ibom, Bayelsa, Delta, Kano and Rivers.
Findings by our correspondent in Abuja showed that due to their strategic importance in terms of revenue allocation, the five states had suffered the highest deductions when the loans for the payment of the Paris club debt were being deducted from the federation account.
It was also gathered that the Federal Government might not pay the final tranche of the N649.43bn refund until after May 29 when new states’ chief executive officers are sworn in.
A top government official confided in Sunday Punch that states that got the highest allocation from the Federation Account Allocation Committee were those that suffered highest deductions during the payment of the Paris club debt.
The Paris Club refunds are the longstanding claims resulting from reported over-deductions regarding Paris Club debts made from state government accounts as far back as 1995 to 2002.
These refunds are over-deductions from the states’ FAAC payments for foreign loan servicing over the stated period.
The refunds have been the subject of dispute between the federal and state governments for quite some time.
The source told our correspondent that now that the amount was being refunded, the same pattern that was adopted for the deduction would be used for the refund.
The source stated, “You will recall that in December 2016, the first tranche of Paris Club refund was made to the state governments.
“The amount given was about N516bn, and out of this, five states — Akwa Ibom, Bayelsa, Delta, Kano and Rivers — got the highest amount of about N135bn.
“A few months later, we released the second tranche of N243bn, and each of these five states got about N10bn which makes about N50bn.”
The source added, “Now that work has been concluded on the final tranche, I can tell you that they will also receive more than other states.
“This is because deductions for the payment of the debt were made from FAAC allocations and these states received more money than any other states of the federation due to the revenue sharing formula.
“So it is natural that since they suffered huge deductions during the payment of the loan a few years back, now that the money is being refunded by the Federal Government to states, they will get what was deducted.”
On when the ministry will start the release of the money, the source said the release of the fund would depend on President Muhammadu Buhari’s directive.
He said, “We have done our own job by verifying how much would be paid to the states government as the final tranche.
“But you know that the administration is winding down in two weeks and from what we are hearing, the cabinet may be dissolved next week.
“So there is no possibility that the money will be released before the dissolution of the cabinet.
“Secondly, there will also be a change of government in many of the states. So, you don’t expect that such huge sums of money would be released by the Federal Government to state governments at this time when there are so many uncertainties.
“From the look of things, the release of the fund may be done when the new administration settles down after the formation of a new cabinet.”
The Special Adviser on Media to the Minister of Finance, Mr. Paul Ella, said he had no information on when the amount would be released.