29/09/2023
*NED NWOKO'S $68 MILLION PAYMENT DELAY SPARKS CONCERN*
Ned Munir Nwoko, the incumbent Senator representing Delta North Senatorial District, holds a pivotal position in Nigeria’s financial landscape. He played a crucial role in the initiation of the London and Paris Club Loans exit program, which ultimately led to the Nigerian government discontinuing monthly deductions from states’ allocations and commencing the process of refunding states.
_Despite his instrumental contributions, Nwoko has encountered significant challenges in receiving the compensation rightfully owed to him for his services_. The primary obstacle in securing his due payments stems from the Federal government’s initial error in fund transfers, creating a protracted and complex situation.
Concerns have arisen due to the delay in Nwoko’s payment, especially in light of a recent development where the Federal Government has petitioned a Federal High Court in Abuja to invalidate the promissory notes issued to consultants regarding the $418 million Paris Club refund.
Ned Nwoko’s primary concern among the $418 million relates to $68 million, which stems from his work for state governments in securing refunds for over-deductions over the years, under his personal name. All the refunds were received, and this matter does not involve local governments. The 36 states received over $13 billion in refunds. Nwoko was contracted to perform a specific task, completed it, and received a partial payment.
The issue of partial payment and promissory notes arose because the Federal Government failed to follow the initial agreement, where they were supposed to deduct at source,Nwoko’s fee from the refunds and pay him directly. Instead, they paid the fees to the Nigerian Governors’ Forum (NGF).
The refunds were scheduled to be made in multiple tranches, with each tranche intended to include a deduction of Nwoko’s fee by the Federal Government before forwarding the remaining balance to the state governments (represented by NGF). However, in all,the Federal Government deviated from the initial agreement by paying the fees to the NGF without deducting Nwoko’s fee. Atleast the sums of 19b and $86m were paid to Ngf at the time.
In response to this, Nwoko initiated legal action against the NGF, which eventually led to a swift resolution through a consent judgment and terms of settlement. The consent judgment and terms of settlement outlined several points, including the payment of what was available at the time to Nwoko and future payments were to be directly paid by the Central Bank of Nigeria (CBN).
During the process of reaching the terms of settlement, Nwoko negotiated his fees down to $68 million through meetings facilitated by the Attorney-General of the Federation .It should be noted that all the 36 governors had signed separate letters to the Minister of Finance, authorizing 5% deductions from their respective states’ impending refunds to cover Nwoko’s fees. Throughout this process, the Federal Government was actively involved and represented by the Attorney-General of the Federation’s office, the Ministry of Justice, and the Ministry of Finance.
However, despite the governors’ authorization for the 5% deduction, the Federal Government did not deduct this amount from the states’ refunds. Instead, they paid the full sums to the states, leaving Nwoko’s fees unpaid.
This situation led to a court mandamus order. The court issued a mandamus order mandating the Federal Government to issue promissory notes, a step taken by the Federal Government without appealing the order. These promissory notes were duly signed by the Minister of Finance on behalf of the Federal Government, and the Director-General of the Debt Management Office witnessed them. This was done with the aim of clearing the debt by making deductions from each state’s monthly allocations for a specified period, given that the Federal Government had already paid the entire refunds amount to the states’ accounts. These promissory notes explicitly expressed the Federal Government’s commitment to honoring its obligations, effectively indicating that they were in support of Nwoko’s claim.
It is crucial to emphasize that the Federal Government’s current attempts to challenge the validity of the promissory notes, years after issuing them, are unreasonable and unjust unless there is evidence of fraud, which no one has alleged against Nwoko. Both the Department of State Services (DSS) and the Economic and Financial Crimes Commission (EFCC) have done their duties of investigation and intelligence gathering and concluded that Nwoko should be rightfully paid for his services.
The Federal Government’s actions seem to be an attempt to evade their responsibility, likely influenced by state Governors’ action, opposing the deductions from their monthly allocations. Nwoko should not suffer the consequences of the Federal Government’s initial mistakes, especially when the court’s mandamus order went unchallenged by the Federal Government.
Part of the promissory notes explicitly states, “This promissory note is backed by the full faith and credit of the Federal government of Nigeria and charged upon the general assets of Nigeria.” Indeed, this simply implies that the Federal Government’s assets and integrity are at stake.
Even though Governors are opposing deductions from their monthly allocations but have told Federal Government that they can pay from any other source. What happens if Ned nwoko decides to execute the judgements abroad? It will certainly be against the assets of the FGN. In that scenario states will have little or no role to play there. Again, agreeing to accept payments by way of promissory notes is a favor done to the states and federal government because the promissory notes were spread over ten years. Why is federal government looking for trouble?
It is crucial that justice prevails in this matter, as the repercussions extend beyond Nigeria’s borders. These promissory notes are not only irrevocable but also negotiable and transferable, making the credibility of the Federal Government in international financial circles a significant concern. Who will accept a sovereign instrument from a federal government that has no qualms in deceitfully attempting to go back on properly earned and properly executed promissory notes? Equitable estoppel comes to mind.
The resolution is clear; honour and redeem the promissory notes and find ways of reconciling with the states.
© Top Reporter Blog
