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The politics of Abia’s N22bn Paris Club Refund

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The N22billion Paris Refund from the federal government to Abia state in 2017 is currently tearing officials of the state government and the consultants apart on the one hand, and the opposition groups on the other. At the peak of the crisis last week, leader of the opposition in the state, and former managing director of the defunct Diamond Bank, Dr Alex Otti, said the governor, Dr Okezie Ikpeazu, must provide detailed account of how the state’s share of the Paris Club refunds was applied, and also ensure that the N11billion meant as ‘consultancy fees’ is recovered. CHIBISI OHAKAH from our Abuja office writes.

Picking hints from revelations made to the Economic and Financial Crimes Commission (EFCC) by a whistle blower, who is former commissioner for finance in Abia state, Mr. Obinna Oriaku, the defunct Diamond Bank boss, Dr Alex Otti, alleged in a press release issued in Abuja last week, that while not having a convincing evidence of the application of the Paris Fund refund, the Abia state government had commenced payment of N11billion representing 50% of the principal sum, being ‘Consultancy Fee’ to more than one consultant.

The Paris Club refund represented excess deductions on the Paris Club debts, which the federal government refunded to states in tranches to assist them defray salary arrears and other debts. Abia state received a total of N22 billion between 2016 and 2017.

While making available the second tranche of the money the federal government, through the federal ministry of finance, gave conditions state governments had to meet to qualify for the payment of the balance of $2.69 billion (about N823.5 billion).

The conditions included states undertaking to give priority to payment of workers’ salaries and staff-related arrears, in the utilisation of the refund.

Other conditions were a commitment by all states to the commencement of the repayment of budget support loans granted by the federal government in 2016, and commitment to clearing all amounts due to the Presidential Fertiliser Initiative (PFI).

Also agreed by the governors was to show commitment to clearing matching grants from the Universal Basic Education Commission (UBEC). At the time, some states had available funds with UBEC, which were expected to be used to improve primary education and learning outcomes.

However, under interrogation, the former Abia state finance commissioner, told the Economic Financial Crimes Commission that a former governor of the state, Senator Theodore Orji, had handed over two consultants to his successor, Ikpeazu, to continue negotiations for securing the money at 30% and 20% consultancy fees respectively, which implied that the so-called consultants were to be paid N11 billion (50%) of the N22bn paid to the Ikpeazu government.

Otti, who was the governorship candidate of the All Progressives Grand Alliance (APGA), but had since decamped to the All Progressive Congress (APC), wondered why the current governor continued to work with the consultants with such huge fees, when he did not need them

Otti said he was convinced that something was amiss in the way the refund was utilised hence the interest shown by the Economic and Financial Crimes Commission (EFCC), which has been inviting past officials of the state government for questioning. The APC chieftain recalled that he had charged the Ikpeazu administration “to ensure responsibility in the management of the funds,” regretting that contrary to expectations, “the funds were received and utilised without the government clearing the humongous unpaid salary and pension arrears till this moment,” the former Diamond boss stated

According to him, the “damning revelations” made by the former commissioner for finance, showed that there was more than meets the eye in the engagement of two consultants for the purpose of the Paris Club refund. “The duplication is aimed at short-changing the state,” Otti stated, adding that it would be proper for the governor to explain why he “did not terminate the agreement on assumption of office knowing that it was unreasonable.”

In response to Otti’s insinuation of possible misappropriation, another former commissioner of finance in the state, Dr Phillip Nto, described Otti’s claims as one with “bitterness, frustration and hatred, all disguised in the name of patriotism.” Nto, who served as commissioner of finance in Abia state from 2013 to 2015, in the administration of Governor Theodore Orji, insisted that no Paris Club refund was received by that administration.

He also said no formal contract was signed with any consultant for the payment of a consolidated 50% consultancy fee. Nto said it was “mischievous” on the side of the APC governorship hopeful to allege fraud in the management of the Paris Club refund, as even “the 30% stated in the letter being brandied by the consultant does not constitute a formal contract,” he said

Shortly after honouring the EFCC invitation, Oriaku told newsmen in Umuahia that the members of the public got to know about the development because Governor Ikpeazu refused to honour the payments when he realised that another consultant, Ziplon Nigeria Limited, was claiming another payment, a 20%, for the same job. The new consultant was equally claiming to have been appointed by former governor, Orji. The two payments amounted to 50% of the total sum refunded at the time.

Oriaku confirmed that Mauritzie Nig Ltd was appointed in 2011 when the first Paris Club refund of N8.25 billion was paid by federal government. The company’s consultancy was reportedly renewed in 2014 in anticipation of the next tranche of the refunds. The former commissioner wondered how another consultant could have been issued another letter to perform the same job on behalf of the state government

“The implication is that upon receiving N22 billion, a whopping N11 billion would be lost under spurious circumstances. I received intimidation, threat, and blackmail (as commissioner of finance) from powers that be to pay the consultants. Other states like Benue, Akwa Ibom and Enugu were negotiating for between 3 and 5%, yet with the same Mauritz Walton that signed 30% with Abia state.                 

“At a meeting at the Abia state lodge, Abuja, with the state attorney general, Chief Umeh Kalu, we asked the consultants to go and harmonise among themselves since they were sent from the same family, who were the owners of the state. Beyond its gubernatorial hopeful, the APC as a political party has also sworn to ensure that all the characters, whether in the previous administration or the current one in the state, fingered in the Paris Club refund are brought to book.

Sensing a hidden agenda, the All Progressives Congress has called on the state House of Assembly to discontinue the ongoing probe over the monies, pointing out that the speaker of the assembly was a key player in the circumstances surrounding the monies. The party state chapter issued a statement last week calling on the state House of Assembly to respect the judiciary and stop the investigation into how the N22 billion Paris Club refund was utilised in the state. The speaker, Engr Chinedu Orji, had set up ad hoc committee, following a petition former commissioner for finance, Mr. Obinna Oriaku.

In the statement, the state APC publicity secretary, Benedict Godson, reminded the Assembly that the case was still in court, stressing that Orji must avoid any form of legislative disrespect for the judiciary until the case was determined.

“The committee set up by the House to investigate the N22bn Paris club refund case already ongoing in court with whatever excuse that it was brought to them by a lawyer or a law firm is unacceptable and a sign of desperation. How can a House led by a Speaker, who is purely involved in the case, convince a sane person that their purported move to ascertain the validity or otherwise of the allegations raised by a former Commissioner for Finance, Mr. Obinna Oriaku, is in the interest of justice?

“All we are saying is that the House of Assembly should not try to interfere in a case that is already in court for whatever reason,” the APC spokesman said

Meanwhile, the chief executive officer of Mauritz Walton Nig. Ltd, Dr Maurice Ibe, in his case in court against the Abia state government, said he approached the court due to some shady deals he noticed in the consultancy job he did for the state government.

According to him, the Abia State government recruited a third party to claim the financial benefit of the contract his company executed with the aim of denying his firm its due benefits. Mauritz Walton sued Abia government for allegedly failing to pay it an agreed 30% of the $151,410,816.39 it helped recover from the Federal Government as refund of the Paris Club Fund.

Ibe told the court that he was engaged by former Governor Theodore Orji to determine, reconcile and recover the debt owed Abia state by the federal government by virtue of the excessive deduction made against the state in relation to foreign loan repayment. According to him, after executing the job and was making demand for the payment of its due 30% of the recovered sum, the state government brought in another firm, Ziplon Concept, and claimed that it had renegotiated with it (Ziplon) to carry out the same job for the state.

“At that point, I told him, I will not be part of money laundering for any individual or entity because of my `career and profession,” he said, adding that it was for that reason that he wrote a petition to the EFCC against the Abia state government and some of its officials.

He said he rejected any offers that would further deplete the amount of money recovered because it would be in “bad intent, deceitful and in bad faith, and I did not even consider it”. Maurice stressed that all he needed and had asked the Abia state government and the Ziplon to do, was for them to provide him, “be it a sheet of paper, documents etc that showed the Ziplon did a legitimate job as per recovery of the excess deductions.

“If they do, we can then know how to apply sharing formula, but till today, no evidence, not even a single piece of paper has been presented as work product,” he said

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