PRESS STATEMENT FROM THE FEDERAL MINISTRY OF FINANCE REIMBURSEMENT OF OVER-DEDUCTIONS ON PARIS CLUB LOANS FROM STATE GOVERNMENTS

State Governments have submitted to the Federal Government (FG), claims of over-deductions for external debt service arising between 1995 and 2002 as a result of First Line Charge deductions from the Federation Account Allocation Committee (FAAC) allocations.

These debt service deductions are in respect of the Paris Club, London Club and Multilateral debts of the FG and States. While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some States had already been overcharged.

On the request by State Governments for a refund of amounts owed by the Federal Government, Mr. President directed that claims be subject to verification by the Debt Management Office and a team was established and given the mandate to scrutinise claims and reconcile with available records. The brief for the team was also extended to include a review of interim payments made under previous administrations.