Buhari

In fact the first grand deception is to name it PARIS CLUB REFUND. It is a FEDERAL GOVERNMENT REFUND to states, if at all it is justified. Another question pops up: Should the federal government be refunding states anything in this recession? Are we printing money to pay these guys, in a situation that hasn’t been fully looked into?


The other day I was asked to come on Silverbird TV to speak on the issue of the Paris Club refunds. As usual I like to do a bit of research on a subject before going on air. And I was still researching as I got to the studio. I was reading Nonso Obikili’s piece on the subject matter. And I was stunned.

You see, in Nigeria, we often get one mantra or cliché or the other that overtakes everything and becomes received wisdom. We repeat such phrases without thinking. Those who control stuff in Nigeria have done well in the mind-control department. They have us where they want us. That is the story of this Paris Club refund business. When it started, I didn’t pay much mind to it. I just felt, “OK so Paris Club deducted too much when we paid them, and now they are repaying? Well, good luck to the governors”. But that is not the case. Nonso’s piece was where I first found out that not a dime has been refunded to Nigeria by the Paris Club, or any club for that matter. And not a dime is refundable! When Nigeria paid that Club of lenders the sum of $12,215,000,000 (over twelve billion US dollars in 2006), the entire business was concluded on all loans taken up to that point. The issue of any refund could no longer come up because we were owing over $30billion to the said club and $18billion was written off. Clean slate. Start afresh. Some well-meaning foreigners even complained about why the club (or the rich countries), should collect that much (40 percent of loan book) from a poor country such as Nigeria. They said Nigeria was rich, or mid-income. I wrote about some of that last week.

As I write this, Nigeria is actually owing the ‘club’ $290 million (see screenshots below from the website of the Paris Club). So they don’t owe us a farthing.

A bit of background. These ‘clubs’ – Paris and London – were formed circumstantially. They never set out to be groups as such but the necessity of countries like Nigeria with their hands permanently in the cookie jar made it a reality, because the rich countries had to unite to enforce compliance with the terms of their loans to the profligate countries. Brazil recently joined the club. Can you beat that? To qualify, Brazil can now be described as a nation with ‘large exposure to other nations’. Other members include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, Netherlands, Norway, Russia, Spain, Switzerland, UK and USA; basically all countries that make sense in this world.

I intend to ask some questions about this celebrated Paris Club refund matter. The questions are meant to expose the fraud being perpetrated right under our noses. But before I proceed, I recall I was a mere teenager in 1985/86 when General Ibrahim Babangida sought to collect a loan for Nigeria from the IMF/World Bank. Even as a military man, he threw the debate open and Nigerians vented their spleens (verbally at least). Even I had something to say on the loans as I trekked a kilometre to buy newspapers for the old man and read most of it on my way back. It is remarkable how today, Nigerians have become self-worshippers, a selfie generation soaked in the delusion that all that matters is to make personal money, or that at the end they will conquer their neighbours financially. Today, under a supposed democratic government, no questions are asked and no answers are offered, as a new-fangled rape of the future occurs, right under our very beautiful powdered noses.

My questions, which I want Nigerians to ruminate over are:

1. Why is Nigeria’s federal government refunding the states?

2. What is the basis of the calculations for whatever was overcharged?

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3. Why are we not having the calculations in the public?

4. Does the federal government have the liquidity with which to pay the states out of hand, or are our recent borrowings directed towards paying the states? Did we all agree to that?

5. Are the powerful governors arm-twisting the president because of politics and re-election gambits?

Are the governors meant to be accountable to the citizens of their states at all? Do the refunds not belong wholly to the citizens of the states, dead, living and unborn? Why then are the governors treating the funds like personal monies to be spent at will and according to their caprices?


6. What is the basis of considering the historical facts of Nigeria e.g. How many states were in existence in the period under contention (1992-2005), compared to those who are receiving refunds now?

7. If indeed there are refunds which the federal owes the state governments, from transactions which occurred decades ago under different governments, what gives today’s governors the full rights to do and undo with the money? Why spend it all in one year, or in one month? Why not spread into the next administration?

8. If all the refunds are deemed inadequate for today’s needs, how will incoming governors fare, given the many problems that state governors recount?

9. What is the idea of paying ‘consultants’ up to 30 percent of the refunds in some states? Is it true, as alleged by some Nigerians – including Col Abubakar Umar (Rtd), that these consultants were brought in to cream off part of the monies for the governors?

10. What roles could the consultants really perform when this is strictly a matter between the federal and state governments, which have full compliments of finance ministers/commissioners and accountant-generals among others?

11. In reflecting on the ‘refunds’, was the fact that $18 billion was forgiven by the Paris Club considered? What proportion of the ‘refund’ due should the states also write off as a result of this debt forgiveness?

12. If the monies were due to states, how come some of it passed through the “Governors’ Forum” accounts for disbursement to ‘consultants’ – for which reason seven accounts linked to the Forum were frozen by the EFCC just last week?

13. Are the governors meant to be accountable to the citizens of their states at all? Do the refunds not belong wholly to the citizens of the states, dead, living and unborn? Why then are the governors treating the funds like personal monies to be spent at will and according to their caprices?

14. Did the people in each state take part in the negotiation of the huge fees being paid to contractors? Or have we all turned to zombies with no thinking faculties?

15. Why is the lie that Paris Club is paying any money back to Nigeria as refund being promoted by elements in and around the governors, subtly and overtly? Is that not dishonesty and fraud?

16. Is it wise for the federal government to be borrowing hugely from abroad in order to pay slush funds to governors who were supposedly unable to pay salaries; monies that Nigeria will have to grapple with because we are in another debt trap?

17. Did the contestants for governorship positions not do any thinking before vying for the positions? Why do they kill themselves to be governors when they should have known that it’s a useless position?

18. Are all these problems not showing us clearly that our economy is totally shambolic, lacking in imagination, comatose, and that we have to throw away everything and start again – urgently?

Has the federal government considered the ramifications of this extra-budgetary expenditure on the economy at large? The states claim about N2 trillion was deducted. Some accounts say N3 trillion… But I am concerned about the distortionary effect, the inflationary effect, and the awful fact that the entire funds is without audit or control!


19. Are we not seeing now that we have bled this economy to death and looted it to stupor; that our budgets are too tiny because our leaders are afraid to go after their tax-dodging, waiver-peddling, asset-stripping friends?

20. Are states and local governments actually claiming that they borrowed nothing from the Paris Club in the 80s and early 90s? I have the record, but if the DMO is not ready to avail them, the newspaper houses do. I have a cut out of the list of unbelievable loans from PUNCH and Tribune way back from 2006.

21. Why did the governors and the president rush the DMO to conclude the reconciliation in 12 months, instead of the 22 months they asked for, according to the minister of finance?

22. Why did the governors stampede Buhari into paying a refund that they couldn’t extract even from Goodluck Jonathan, Obasanjo or Yar’Adua?

23. With the promise to RECOUP excesses later if any state is found to have been overpaid, WHY SHOULD FUTURE GOVERNORS pay for the heist of today? And why should our people at the states suffer from today’s robbery by the governors?

24. Why is there no total transparency around the issue, and why is it not Nigerians determining who gets what? Yes. Why are the claims not subject to public verification?

25. Has the federal government considered the ramifications of this extra-budgetary expenditure on the economy at large? The states claim about N2 trillion was deducted. Some accounts say N3 trillion. About N800 billion has been released thus far without any appropriation bill. Some have said this is totally illegal. But I am concerned about the distortionary effect, the inflationary effect, and the awful fact that the entire funds is without audit or control!

26. What is the role of the Senate president as alleged? Is it true that he benefited from some of the releases and that that is why the entire National Assembly are rather getting in on the action by harassing the state governors rather than pointing out this constitutional breach?

The other day I did a research around budgets and spent time looking at how things are done in South Africa. Not only are they budgeting ten times what Nigeria budgets – meaning that they are actively growing their economy by ensuring that revenues due to government are captured and indeed used to develop the country and make the people more comfortable – they are extremely transparent. I know it is not Jacob Zuma that instituted that level of transparency though. SA is lightyears ahead of Nigeria in everything – but for the poverty and relative directionlessness of its black populace. Nigeria is where it is today because our leaders don’t believe at all in transparency. It’s a shame. Or why would governors believe they can collect refunds due to everybody and spend anyhow – if indeed the states are entitled to refunds. I personally don’t believe the states are. If they are, let everybody bring out the books and let Nigerians decide.

The evidence in the open space points to the contrary of what is going on. Let us sample some opinions to corroborate some of my positions:

All this is because this is a ‘paddy-paddy’, ‘Army Arrangement’ between our federal and state governments, that the president actually directed them to use the money to pay government workers. No foreign entity can direct our governors on what to do with legitimate monies due to their people.


When asked what was going on, the Abia State governor has his spokesman, Onyebuchi Ememanka say this:

“When the over deductions were sorted out, the federal government and the 36 states, including the FCT, agreed that the states should get these funds back and discussions on the modalities commenced. This was during the administration of former President Goodluck Jonathan. As a result of the complex nature of the transactions, the states then under the auspices of the Nigerian Governors Forum agreed to hire the services of financial advisors and consultants to assist in determining the exact amount due to each state under the refund scheme. Each state agreed with the consultants on the details of the contractual agreement and how much was to be paid as fees… Please note that all the 36 states then agreed to this. The refunds were never made by the last administration which left the entire scheme, including the agreements with the consultants, to lie in abeyance. It was the present government of President Buhari that now agreed to make the refunds and this naturally reactivated the interests of the consultants.”

The above statement confirms that this is a deal strictly between our federal and state governments. In fact the first grand deception is to name it PARIS CLUB REFUND. It is a FEDERAL GOVERNMENT REFUND to states, if at all it is justified. Another question pops up: Should the federal government be refunding states anything in this recession? Are we printing money to pay these guys, in a situation that hasn’t been fully looked into?

Let’s look at another statement, this time from Honorable Ned Nwoko, who was recently praised for being one of the architects of getting refund from these bad oyibo people. He explains:

“Well, while the battle was on, we encountered series of hostility from creditor nations. Some countries felt that we were impugning their national integrity and threatened to severe diplomatic relations with Nigeria. Some of them sent their security agents to go after us; some employed acts of blackmail and tried to compromise us…. Some even went to the extent to convince the (President) Obasanjo administration to instigate the Economic and Financial Crimes Commission (EFCC), against us. We were even arrested, and after investigating us, the EFCC had to apologise to us… It became an uphill task to obtain the required data, and vital documents where we needed forensic evidence to support our work… As an international legal firm, we had worked for some countries in Africa, specially West Africa. The countries engaged our firm to assist them to verify the process of repayment of their foreign loans and, in the process, we discovered that there were unethical things that had taken place… We entered into legally-binding agreements with some of the states, and as we progressed the other states and local governments became interested. For instance, under what was called ‘the doctrine of collective sacrifice,’ the Federal Ministry of Finance deducts funds from states and local governments at source from the federal account… The implication was that some states that were not in existence when the foreign loans were contracted suddenly found themselves making repayments for loans that they did not contract. The 774 local governments that never contracted any foreign loan were grouped into the repayment. During our investigation, we found that some of the loans were of dubious origin. The old Gongola State was listed as having contracted $100 million as foreign loan from an Austrian bank to build an international hotel. But in the process of our investigation, the bank wrote to say that it had no business relation in Africa, let alone in Nigeria.”

Ned Munir Nwoko, a former member of the House of Reps here, has floated us a load of baloney in the statement above. This is one of the attempts to paint the deceptive picture that the Paris Club or any foreign country has anything to do with the roguery that is going on. Luckily, I have found that the Paris Club now has a secretariat in, well, Paris… Their website is at www.clubdeparis.org and I reckon anyone who wants to call them to find out anything about Nigeria can do so. There is no information at all on their website that they are refunding Nigeria anything. Only that Nigeria is owing them fresh money. By the way, one of their principles is TRANSPARENCY.

All this is because this is a ‘paddy-paddy’, ‘Army Arrangement’ between our federal and state governments, that the president actually directed them to use the money to pay government workers. No foreign entity can direct our governors on what to do with legitimate monies due to their people.

Regarding Nwoko’s claim on Gongola State, that is the fate of the loans that our governors took in the 1970s and 80s. As at that time, state governors and local government chiefs went abroad and borrowed monies which the federal government was liable to pay in the event of default. I explained some of that last week. It’s the way the world of international finance works. I can still picture that list in my head. I can see the fantastic projects which Nigerians – some of whom are great granpas today and will want to lecture us on morals – collected. Useless fantastic loans with which they built NOTHING! Here is what Professor C. C. Soludo had to say in a book he co-wrote with Dr. Ngozi Okonjo-Iweala and Mansur Muhtar in 2003. The book is titled The Debt Trap in Nigeria (a very interesting title even though all of them promoted policies that sent us back into the trap, including the current government). Funny, the three of them have had several goes at the Nigerian economy with varying disastrous results, these Breton Woods gurus. Hear Soludo anyway:

“…The preceding argument would counsel against recourse to borrowing in the short to medium terms. Answers to two questions would help to make this position clearer. First, what happened to the nearly US$300 billion in oil revenues in the last three decades? We know that much of it was wasted and stolen, with the average Nigerian getting impoverished. What did we do with the various oil windfalls during the Shagari and Babangida regimes? Second, what did Nigeria achieve with the billions of dollars it borrowed in the past? Not much either. For example, a survey of some 145 projects funded by US$14 billion revealed that about 18 of them never even got started, and yet the loans were fully drawn, and many others remained uncompleted, and of those that were completed, many were non-performing… So let us first of all work on efficiency…. However, reckless borrowing and spending to satisfy short-term political interests but jeopardise the long-term economic interests of the poor is not the way to do it… Paradoxically, a major challenge during this period of oil boom is how to restrain the state institutions to manage them effectively. What Nigeria cannot afford is a repeat of the history of wasteful spending…”

Ladies and gentlemen, the above was written in 2003. It confirms that Nwoko’s statement above about Gongola State is a sham. The world knows that our governors and local government chairmen – then and now – borrow money for phantom projects. The question is: Why have all our leaders (including a man in whom we invested so much trust), ganged up against the poor masses? Time is running out. I have no more to say

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References

Onwubiko, E. (2017): Nwoko, A Patriot’s Role Towards Paris Club. News Express. Refund. Retrieved from; http://www.newsexpressngr.com/news/42068-Nwoko-A-Patriots-role-towards-Paris-Club-refund

Teniola, E.: Taking Us on a Jolly Ride. Premium Times. Retrieved from: https://opinion.premiumtimesng.com/2017/11/26/taking-us-on-a-jolly-ride-by-eric-teniola/

Abdulaziz, A. (2017): How we Secured N1Trillion Paris Club Refunds Deal from Buhari. Retrieved from: https://blueprint.ng/n1trn-paris-club-refunds-how-we-sealed-deal-with-buhari-govs/

Uchegbu, A. C (2017): Scam in Paris Club Refund. News Diary Online. Retrieved from: https://newsdiaryonline.com/scam-paris-club-refund-achilleus-chud-uchegbu/

Jeje, M (2017): Paris Club Refund: The Collusion and Looting of Nigerian State. Retrieved from: http://persecondnews.com/2017/07/paris-club-refund-collusion-looting-nigerian-state/

Paris Club: Court Freezes 7 Governors’ Forum Accounts. Retrieved from: http://punchng.com/paris-club-refund-court-freezes-seven-accounts-linked-to-governors-forum/

Obikili, N (2017): Quick Question on the “Paris Club Refund”. Retrieved from: https://nonsoobikili.wordpress.com/2017/03/24/quick-question-on-the-paris-club-refund/

‘Tope Fasua, an Economist, author, blogger and entrepreneur, can be reached through topsyfash@yahoo.com.