The President Muhammadu Buhari administration says states must clear the backlog of salaries and other staff arrears before they would be allowed to access the remaining 2.69 billion dollars Paris Club Refund.
This was made known on Tuesday by the Director of Information, Federal Ministry of Finance, Hassan Dodo.
He said that the Federal Government would commence phased payments of the refund to the states once the condition and several others were met.
“The DMO led the reconciliation process under the supervision of the Federal Ministry of Finance. The final approval of 2.69 billion dollars is subject to some conditions,” Dodo said in a statement.
“Salary and staff related arrears must be paid as a priority. Also, commitment to the commencement of the repayment of Budget Support Loans granted in 2016 must be made by all states.
“Furthermore, they must clear amounts due to the Presidential Fertiliser Initiative and make commitment to clear matching grants from UBEC.
“This is in cases where some states have available funds which could be used to improve primary education and learning outcomes.”
The issue of Paris Club loan had been a long-standing dispute between the Federal Government and the state governments, dating back to 1995.
President Buhari had directed that the claims of over-deduction should be formally and individually reconciled by the Debt Management Office.
This reconciliation commenced in November 2016.