WHEN an acclaimed Interim Management Committee, IMC, of the Association of Local Governments of Nigeria, ALGON, January 10, raised the alarm that authorities of the 774 local government areas in the country were in the dark over an ostensibly decided plan by the Federal Government to deduct money running into billions of naira from their statutory allocations in the next 10 years, starting from 2021, and pay same as consultancy fees to popular politician and lawyer, Prince Ned Munir Nwoko, and other professionals, not a few Nigerians were startled by the disclosure
The interim leadership pointed fingers at some ALGON leaders who, it alleged, connived with not more than 10 local government chairmen to deceptively approve some contracts and consultancies.
Secretary-General, ALGON IMC, Muhammed Abubakar, in a statement titled “ALGON IMC Dissociates Self from Approval for Payments to Ned Nwoko, Others” said: “The attention of the Interim Management Committee of Association of Local Governments of Nigeria, ALGON, has been drawn to some online publications stating that ALGON consented to the payment of billions of Naira for a decade to Prince Munir Ned Nwoko.
“I will like to state it categorically that the Interim Management Committee of ALGON is not aware of the terms of settlement that led to the consent judgment. It was neither signed nor authorised by it, but was sanctioned by the dissolved Hon. Kolade Alabi-led executive to plunge the 774 local governments in Nigeria into further financial crises without consulting the chairmen of the respective local governments across the country.
“It is quite unfortunate that ALGON with a core mandate of protecting the interest of 774 local governments across the country is now being used by not up to 10 chairmen to approve payments for jobs/contracts not executed and/or consultancies not rendered without any approval by ALGON NEC but few embattled executive.
“I hereby call on the respective state governors and local government chairmen across the country to timeously appeal the judgment as a party whose interest will be affected by it and file necessary documents to stall the payment for the contract and other similar ones, so that the activities of the third tier of government will not be paralyzed by the economic saboteurs within and their cronies outside ALGON.”
No other permission required to pay Nwoko— Finance Minister
To close observers, it was apparent ALGON was responding to a divulged correspondence dated December 12, 2020, from Minister of Finance, Mrs. Zainab Ahmed to the Chief of Staff to the President, Prof. Ibrahim Gambari on a 10-year period deductions from allocations to states and local governments in Nigeria.
The dispatch entitled: “Re: Liquidation of Judgment Debts On Behalf of Federal Ministries, Departments and Agencies, MDAs; States and Local Governments” with reference number FMF/PSSD/SH/01/VOL.II/320 indicated that the Judgment Debts in Category A, “which are Paris Club related judgment debts would not be included in the 2021-2023 Federal Government Borrowing Plan.”
According to the memo, the debts were not liabilities of the Federal Government of Nigeria, FGN, but of the States and Local Governments, which they said emanated from legal consultancy contracts agreements entered into by those tiers of Government.
“The settlement of this category of judgment debts should ordinarily be effected from funds belonging to the States and Local Governments in the custody of the FGN. That being so, legislative resolution by both Chambers of the National Assembly would not be required for their liquidation.
“On whether the States and Local Governments have formally signed off on the proposed equal monthly deductions from their Statutory Allocations over a period of 10 years to defray the relevant expenses incurred by the FGN on their behalf in relation to the claims of the Category A Judgment Creditors, it is pertinent to state that the consent of a Judgment Debtor (in the case of the States/Local Governments) is not required before a valid Judgment of a court of competent jurisdiction can be enforced,” the minister said.
She added that both the former Chairman of the Nigeria Governors Forum, NGF, and the Association of Local Governments of Nigeria, ALGON, had in 2019, given an indemnity and “No Objection Letters authorising deductions from the relevant Statutory Allocation to meet the Paris Club related claims, especially the claims by Riok Nigeria Ltd and Dr. Ted Iseghohi Edwards.
“While the Judgment debt claims by Hon. Ned Munir Nwoko and Panic Alert Security System Ltd, emanated from Consent Judgments between the Judgment Creditors and the Nigeria Governors Forum, making it unnecessary that further clearance should be sought from the two tiers on the matter.”
The minister explained that the proposition that the deductions be “staggered over 10 years is intended to cushion the adverse effect/impact that one lump sum deduction or shorter period of deduction of the debts would have on the economy of the affected States and Local Governments and, therefore, consent of States and Local Governments were not obtained.”
Alabi disowns interim ALGON, confirms LGAs engaged Nwoko
Contacted, ALGON national president, Kolade Alabi, told Vanguard that those accusing him of plunging the 774 local governments into financial crisis were ignorant as the consultancy services carried out by Prince Ned Nwoko for state governments and local government councils were well documented and his leadership never strode the councils into financial crisis as unsubstantiated.
His words: “The local governments engaged Linas International Ltd (CEO, Prince Ned Nwoko) sometime in 2008 or thereabout to secure the payment of Paris Club refunds due to the local governments. The assignment was successfully completed in 2018 and accordingly Linas was paid also in 2018.
“Ned Nwoko & Co was engaged by some state governments for similar assignment and also achieved successful conclusion. I believe that the current payment processing as far as Ned Nwoko’s assignment is concerned is strictly a state government issue. It has nothing to do with local government or local government allocations.”
Hon Alabi punctured the claim of interim leadership of ALGON, saying, “ALGON has one united leadership with my humble self as the national president. Any talk or reference to any real or imaginary IMC remains a figment of imagination of whoever that is propounding it.”
Yes, LGAs hired, paid Linas— Ikpokpo, Delta ALGON chair
ALGON chairman in Delta State and immediate past chairman, Isoko South local government area, Hon Constantine Ikpokpo said: “I am aware Linas International Limited owned by Prince Ned Nwoko in 2007 or 2008 was engaged to recover funds for Paris Club debts, I am also aware that he has been paid by the local governments.
“I think that is where the problem is and if he is genuinely owed based on the facts, he should be paid. It is Linas and the governors who should work out a payment plan, not the Federal Government, it is not their money. Finally, I have heard of this group which has no business with ALGON, I feel sorry for anybody who does business with them.
“ALGON has only leadership headed by Hon Kolade Alabi who is ALGON chairman in Lagos State. Unsuspecting public needs to know that you must be ALGON chairman in your state to lead us nationally. Our secretary-general is an accomplished administrator and former federal permanent secretary, Hajiya Binta Bello.”
I was told about Nwoko’s efforts— Osunde, Edo ALGON chair
ALGON chairman in Edo State, Mr. Jerkins Osunde, while reacting to the role played by Prince (Hon) Ned Nwoko in the Paris Club loan repayment, simply said: “I am aware, that was what I was told”.
Rivers ALGON plays hide and seek
In Rivers State, Victor Ihunwon, Port Harcourt City Council chairman, also known as the Mayor of Port Harcourt who is the current Rivers ALGON chairman ignored phone and text enquiries on the matter. Eleme local government council chairman, Phillip Okparaji, equally reneged on earlier promise to offer his perspective on the subject.
However, a former local government chairman in the state told Vanguard on grounds of anonymity: “You do not expect any sitting local government chairman or ALGON members to tell you much. It is not such an interesting subject, even if they know about the matter, which they do, you do not expect anyone to speak in isolation.
“The issue has been there, but if ALGON national leadership has offered a collective position, what is the point asking to hear from individual chairmen. The matter is being dealt with at a collective level. Besides, no local government chairman in Rivers will talk without clearance from the state government on such sensitive issue.”
We are unaware — Usibe, Bassey: past and current C’River ALGON chairs
In Cross River State, Mr. Mike Usibe, who was ALGON Chairman from 2013 -2016, said he was unaware of the role Hon Nwoko played in the Paris Club refund to states and local government areas.
His words: “I am not aware, I was chairman for three years and never heard of any court case or Mr. Ned Nwoko.” Current chairman of ALGON in the state, Mr. Emmanuel Offiong Bassey also exclaimed: “Ha! I am not aware of any such thing.”
Obliviousness in Bayelsa
Hon. Wisdom Fafi, a former Caretaker Chairman of Kolokuma/Opokuma local government area, Bayelsa State, said they were unacquainted that it was Ned Nwoko that took the Federal Government to court that resulted in the Paris Club refunds, adding that some of them were not in office at the time.
According to him: “There were certain things we were not participating in because at ALGON, you need to be an elected chairman, so as caretaker chairmen there were certain things that you could not be part of.”
ALGON should purge itself of ignorance – Earl Onaiwu, ex-DG, Governors Forum
Former Director-General of the Nigerian Governors’ Forum, Earl Osaro Onaiwu, who spoke to Vanguard on the matter, asserted: “I was the Director-General of the Governors’ Forum, so I am in a better position to know what transpired at that time. Prince (Hon). Ned Nwoko is the originator of the Paris Club refund. That money was lying down there dormant and nobody went for it.
“If not for Ned Nwoko who went to court in London and got judgment in his favour and he also got judgment in his favour against the Federal Government, nobody did. It was the judgment against the Federal government that made the government to start the refunding of the loans.
“So, if the current leadership of ALGON are claiming not to know about the roles played by Prince Ned Nwoko on the Paris Club deal, they should asked questions. That is all I can say for now.”
Where were dissenting ALGON officials when Nwoko fought the battle, asks Uduaghan
Former governor of Delta State, Dr. Emmanuel Uduaghan, who spoke to Vanguard on phone, said: “What I know is that Prince Ned Nwoko was the brain behind the Paris Club refund to states and local governments. It is one of the businesses he is very adept in.
“Where were the ALGON people or local government people who are talking when he started the process of the refund? Ned has always been involved with the Paris Club, how will ALGON know, were they involved? Do they know how the refund they got even came about?
“Some of them were not even in politics when the battle was fought and won by Prince Ned Nwoko, so they do not know what happened. They should ask questions, that is what I can say for now.”
ALGON IMC should acquaint themselves with facts— Irechukwu, ex-Imo commissioner
A former Commissioner for Finance in Imo State, Mr. George Irechukwu, who was miffed at the ignorance of some ALGON officials on the transaction said: “They (ALGON) engaged Linas International Limited and wrote a no objection to Federal Ministry of Finance to pay. The ALGON IMC members should be advised to educate and update themselves. I rest my case and wish you well in your work.”
States, LGAs didn’t fund recovery, we did – Linas International Limited
The team of lawyers, J. K Gazadma, SAN; Ken Njemanze, SAN; Joe Agi, SAN; Jeff Njikonye, SAN; Onyeka Nwokolo Esq. and Tim Odaah Esq. who handled the matter for Linas International Limited and Ned Nwoko in a statement made available to Vanguard, said: “The refunds provided huge relief for all the states and local governments.
“This windfall was facilitated by the consultancy work of Linas International Limited which initiated the forensic audit and accounting review process that discovered over deductions and excess charges debited to the account of these tiers of government over time and accelerated with the exit of Nigeria from the London and Paris Club of lenders during the President Olusegun Obasanjo regime.
“The consultancy was on a contingency basis where the payment to Linas International Limited was dependent on the success and actual funds recovered no matter what costs were incurred.
“The consultancy presented huge risks as no funds were committed by the beneficiaries – states and local governments. No state or local governments funded the huge costs involved. Some states and local governments were in fact skeptical about the chances of success.
FG initially resisted payment
“After the above discoveries the Federal Government resisted refunding the funds it unconstitutionally utilised resulting in various law suits in Nigeria. Several senior Nigerian lawyers, accountants and other professionals were engaged by Linas to enforce the rights of the beneficiaries to the excess charges and over deductions.
“Judgments were awarded in favour of Linas International Limited and the local governments against the Federal Government. There are still outstanding professional fees owed to the professionals whose professional exertions facilitated the refunds which the states and local governments enjoyed.
So far, states, LGAs have collected $13 bn refunds
“After initial reluctance the Federal Government commenced compliance with judgement of the court. The Federal Government has fully refunded the states and local governments to the tune of US$13billion. During the refunds the Federal Government made partial provisions for the payment of consultancy fees.
“It secured letters of no objection and letters of indemnity from the state governments. The local governments issued letters confirming the entitlement of Linas International Limited to the payment of its consultancy fees.”
Dubious loans unearthed
Inquiries by Vanguard showed there was no new settlement as Linas and Ned Nwoko already have Federal High Court judgments, including decree absolute up to Supreme Court on behalf of the 774 local governments for the sum of $3.2bn and consent judgments with the states through the Governors Forum.
It was through the same court judgment that the Federal Government was ordered to refund $12bn to states and local governments.
Both states and local governments received the refunds of over $12bn from the Federal Government over time. In fact, the Governors Forum gave guarantee to the Federal Government that they would pay Linas and Nwoko’s fees whenever it became necessary, but Federal Government which was supposed to deduct and pay the consultancy fees at source went along to disburse the refunds without deducting same.
It was also discovered that members of the controversial ALGON IMC, who are interrogating the treaty were not in office when Linas and Nwoko executed the contracts and refunds made to local government areas.
Besides some ALGON officials who confessed that they were uninformed about the business deal did not deny that the councils benefited immensely from the court judgment, which Nwoko and his company secured and also relying on to get their consultancy fees, which is 20 per cent of the total recovered funds.
It was found that in the course of the recovery of the funds by Nwoko’s international legal firm, which had some countries in Africa to verify foreign loans and process of repayment, some government officials instigated EFCC against Ned and his company and built walls making it impossible for Linas to obtain the required data, vital documents needed for forensic evidence to support the recovery. Disturbingly, 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 but during investigation, an informed official hinted: “Ned and this team found that some of the loans were of dubious origin, the old Gongola State was listed as having contracted $100million as foreign loan from an Austrian bank to build an international hotel. However, in the process of our investigation, the bank wrote to say that it had no business relation in Africa, let alone in Nigeria.”
Buhari ordered payment after verifying particulars in 2018
When President Muhammadu Buhari first approved the payment of the accruing fees to the consultants after his attention was drawn to the court judgment in June, 2018, he issued a presidential directive, which was not complied with as the Nigeria Governors Forum, NGF, at the time directed the Office of the Accountant-General of the Federation, OAGF, to withhold payment to the consultants. Nwoko had dragged NGF to court in 2017 when he noticed that it was foot-dragging.
Minister of Justice and Attorney General of the Federation, AGF, Abubakar Malami, SAN, in a legal view dated July 11, 2018 (in reaction to a request by then Chief of Staff to the President for legal opinion) and another letter dated August 18, 2018 (in response to the request for legal opinion by Minister of Finance) unequivocally acknowledged some third party claimants entitled to be paid various amounts as consultancy/legal fees for the services they rendered to states and local governments in relation to the Paris Club refund.
In the letter titled: “Legal opinion on third party claims,” Malami identified one of the consultants as Ned Munir Nwoko, who sued the Nigerian Governors’ Forum, NGF, and seven others in suit: FHC/ABJ/CS/148/2017 and claimed that he was engaged by NGF to provide legal/consultancy services on the Paris Club refund.
Malami said the parties to the suit, including Nwoko and the NGF, entered a consent judgment on May 9, 2017 “to the effect that Hon. Nwoko is entitled to be paid a negotiated percentage on every refund made by the Federal Government to the states. Hon. Ned Munir Nwodo, covered under paragraph five of my letter dated July 11, 2018 has stated that, in view of the unwillingness of the NGF to negotiate and pay him his full entitlement in line with the consent judgment, he is reverting to his initial claim of $71,936,881.36.
“He is, therefore, seeking for the payment of the sum of $68,658,192.83 as outstanding sum due to him from NGF. The EFCC investigation report, dated 1st August 2018 equally confirmed that the judgment creditor (Nwoko) was engaged by 14 states to recover excess deduction with respect to the Paris and London Club debts,” Malami said.
Caveat from Justice Minister
The Justice Minister had warned that since the consultants and other third party claimants have obtained garnishee orders against the Federal Government and the Central Bank of Nigeria (CBN), the Federal Government was under obligation to settle these third party creditors before making disbursement to the states and local government areas.
Malami added: “I wish to reiterate the fact that the payments under consideration are to be made before final payments are made to the states and local governments to avoid a situation where the Federal Government will be forced to bear any unwarranted liability on this subject matter.”
In view of Malami’s advice, the ex-Minister of Finance, Mrs. Kemi Adeosun, in a letter on September 14, 2018 asked the Governor of Central Bank of Nigeria, CBN, Godwin Emefiele to set aside the consultants’ fees, estimated at $350m from the $2,689,279,365 reserved as the final claim to the states and LGs under the Paris loan refund arrangement.
Part of the letter by Mrs. Adeosun read: “Please find attached herewith the approval of President Muhammadu Buhari, dated August 29, 2018 in respect of the final claim on Paris Club loan reimbursement of over-deductions from allocations of states and Local Governments.
“I specifically refer you to paragraph 6 which authorised that the final claim of $2,689,279,365 be paid to qualified states, and paragraph 10(x) which recommended that the sum of $350milion be provided for settling legal/consultancy fees, etc. In view of the above, you are requested to credit Escrow Account domiciled with the CBN with the sum of $350 million”.
The CBN Governor, in a September 18, 2018 letter, acknowledged the directive by the Finance Minister, and sought among others, information on the accounts to which the funds should be paid.
Stumbling block
Malami’s counsel was not adhered to, as in a letter of September 21 to the Attorney-General of the Federation sent through the Finance Minister, the Accountant General of the Federation, Ahmed Idris, attempted to justify why the $350m meant for the payment of legal/consultancy fees is being withheld.
Idris, in the letter titled: “Re: Payment of legal/consultancy fees deducted from states’ reimbursement in respect of final claim on Paris Club loan,” referred to a certain counter-directive by the Chairman of the NGF to withhold the $350m.
Part of the letter read: “The Honourable Attorney General of the Federation and Minister of Justice is kindly referred to our tri-partite discussion at the Ministry of Justice on the above subject vide Mr. President’s approval and be informed that the Chairman of the Governors’ Forum has verbally instructed that the payment be kept on hold.”
Olive branch
The new-fangled staggered 10-year-plan by the current Minister of Finance, Mrs. Ahmed, is meant to lay to rest the controversy over the authenticated obligation of states and local governments to the consultants, who fought tooth and nail to recover their funds.
At the time of this report, Ned Nwoko and Linas have only received one/third of their entitlement, which is 20 percent of the recovered fund of over $12 billion.
