AMCON may seize 36 states accounts over N337.7billion public debts

Minister of state for Finance

The Asset Management Corporation of Nigeria (AMCON) has threatened to seize the accounts of the 36 states of the federation over huge outstanding public debts.

The Debt Management Office (DMO), the government agency charged with the responsibility of managing the country’s debt, puts the country’s total debt stock at $5666.6million (external) and N5.623trillion (domestic) as at December 31, 2011.

A breakdown of the figures shows that the foreign debt stock is made up of $4.567billion to multilateral institutions, consisting the World Bank, African Development Bank (ADB), International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Fund for Agricultural Development (IFAD), African Development Foundation (ADF) as well as Islamic Development Bank (IDB).

A further breakdown indicates that $453.83million of the liability comprises bilateral non-Paris club debt, and $143.82million commercial debt, while Eurobond stands at $500million.

Of the total domestic debt stock of N5.623trillion, Federal Government bonds takes N3.54trillion, or 62.98 per cent; Nigerian Treasury Bill N1.73trillion, or 30.73 per cent and treasury bond instrument stands at N353.7billion, or 6.29 per cent.
According to the debt management agency, of the country’s total external debt stock, the 36 state governments and the Federal Capital Territory (FCT) are having an outstanding to the tune of about $2.165bilion (about N337.7billion) in multilateral debts to various institutions.

The debtor states include Lagos $491.85million; Kaduna $182.26million; Cross River $107.5million; Ogun $94.56million; Oyo $78.085million; Katsina $74.14million; Bauchi $63.43million and Akwa Ibom $62.65million.

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Premium Times learnt that AMCON had  already written to the Federation Accounts Allocation Committee (FAAC) to request for the recovery of the outstanding debts from the affected states, threatening to invoke its powers enshrined in Section 50 (1) and (11) of the AMCON Act 2010.

The Act empowers AMCON to freeze the account of any debtor that it has reasonable cause to believe that it has funds in any account with any financial institution.

The law also stipulates that the corporation shall commence the debt recovery action against the debtor whose account has been frozen within two weeks from the date of an order of a court of competent jurisdiction.

When the issue came up for discussion during last week’s FAAC meeting in Abuja, Chairman of the committee and Minister of State for Finance, Yerima Ngama, advised representatives of the affected states at the meeting to arrange a meeting with AMCON’s  Managing Director, Mustapha Chike-Obi, to negotiate and reconcile the outstanding debts with a view to amicably resolve the issue.

Meanwhile, the states are yet to pay back the N79.97billion loan granted them from the Federation Account Reserve Account as refund for the London Club debt buy-back.

As at last February, the states were to refund about N28.7billion to the Excess crude account; N48.44billion to non-oil reserve account and N2.83billion to oil excess reserve account.

Mr. Ngama, who disclosed this during FAAC meeting last week, lamented that this has made it difficult for the Federation Account to be credited to reflect its true balance, though Central Bank of Nigeria (CBN) gave the total balance in the various accounts, made up of oil and non-oil revenues, as at February 2012,  to be N129.38billion.

A breakdown of the balances in the various accounts as at last February shows that the import duty has about N33.97billion; excise duty N3.55billion; fees N158.3million; 2008-2012 CET special levy N1.34billion; penalty charges N3.77million; company income tax N29.53billion; miscellaneous oil revenue N118.95 million and value added tax N60.67billion

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