The Federal Government may suspend release of  Paris Club refund to states that failed to use the first tranche for payment of workers’ salaries, Punch reports.

According to the newspaper, the governors had agreed with the Federal Government that one of the overriding objectives for further release of the funds was chanelling 50 per cent of the funds to offset backlogs of workers’ salaries and pensions.

An official said, “The finance ministry is currently conducting a detailed review of the claims submitted by the state governors.

“This is in order to determine the amount to be released in the next batch of payment, having released over N500bn in the first tranche.

“Apart from the review of claims that is being done, the usage of the first tranche is  being investigated by a team from the finance ministry and the report of the outcome of that compliance audit would be sent to the President for further action.”

The source added those who failed to comply with the agreement would not receive anymore funds.

“There is already an undertaking that further disbursement of the fund would be based on the rate of compliance with the stated objective by the Federal Government.

“The overriding objective for the release of the fund in the first instance is that 50 per cent must be used for payment of pensions and salaries in the states.

“So, if that agreement is not being met by any state, then of course the government would not release more funds to such a state; what the Federal Government is trying to achieve with that refund is to stimulate the economy through consumer demand,” the source said.

Azeez