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FG, states resume battle over N2.2trn deductions

Legal fireworks are set to resume before the Supreme Court today in the cases filed by states against the Federal Government on illegal deductions from the Federation Account and breaches of Section 162 of the 1999 Constitution.

According to a posting on Economic Confidential’s portal (, there are now 20 states controlled by different political parties (PDP, AC, ANPP and PPA) with a fresh total demand for a refund of N2.2 trillion.

The sum constitutes what the states called illegal deductions by the central government on the management of revenues that accrued to, or which ought to have accrued to the Federation Account from 2004 to 2007.

“As at January 2009, when there were 14 states the total figure for the refunds was N1.45 trillion which was also an increase from the initial N1.1 trillion last year when the legal battle began.

In an updated legal document obtained by Economic Confidential, Rivers State makes the highest demand of N385.58bn as refunds from the illegal deductions, followed by Bayelsa State N300bn, Lagos State N127.43bn, Kaduna State N108.30bn, Imo State N102.46bn, Oyo State N100.87bn, Niger State N99.68bn and Edo State N99.26bn and Cross River State N98.91bn.

Others include Benue State which demands for a refund of N95.30bn, Kogi State N86.21bn, Plateau State N86bn, Taraba State N84.98bn, Ogun N84.07bn, Yobe N82.55bn, Osun N80.77bn, Ebonyi State N74.73, Ekiti State N74.31bn Bauchi State N99.62bn and Abia State N26.36bn.

In January, the states agreed to step down prosecution of the cases before the Supreme Court for a period of three months following overtures by the Federal Government to have the cases settled out of Court. Then, the Federal Government, through Vice-President Jonathan Goodluck, set up a Committee comprising representatives of the states and the Federal Government to engage in negotiations and to work out mutually agreeable terms of settlement within three months.

The committee was headed by Finance Minister, Dr. Mansur Muhktar.

According to sources close to the committee, the states have become concerned that six months after agreeing to step down the prosecution of their cases and despite the fact that within the Committee, consensus in their favour had been reached, the Federal Government is yet to take any definitive steps to properly document the agreement on the issues on which consensus has been reached.

Sources further revealed that the states have sadly come to the conclusion that the settlement overture of the Federal Government may be no more than an elaborate and carefully orchestrated ploy to delay the prosecution of the cases before the Supreme Court.

One of the officials of the aggrieved States, who spoke to Economic Confidential on condition of anonymity, confirmed this development and stated that his state and others have resolved to press ahead with the prosecution of their legitimate claim before the Supreme Court.

His words: “The issues that we have raised before the Supreme Court are of high constitutional importance. Those issues go to the root of the fiscal relations between the tiers of government in Nigeria and we are fully resolved to pursue our case to its logical conclusion. Our lawyers have been fully instructed to continue with the prosecution of the cases before the Supreme Court on Tuesday 30th June 2009. We have infinite faith that the Supreme Court will ensure that justice is done in this matter.”

The number of States that have dragged the Federal Government before the Supreme Court has now risen to 20. Indications are that, with the breakdown of the settlement initiative, even more states that had been waiting to see the outcome of the Federal Government’s settlement initiative will also drag the Federal Government before the Supreme Court.


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