A federal high court in Abuja has stopped the federal government from deducting $418 million from the bank accounts of the 36 states of the federation.

The court, in a ruling delivered by Inyang Ekwo, the judge, ordered FG to suspend the planned action, pending the determination of a suit brought before it by governments of the 36 states.

Last week, Kayode Fayemi, governor of Ekiti, said state governments will not accept arbitrary deductions of funds by the federal government.

Jibrin Okutepa, who led the legal team of the states, told Ekwo that the 36 states would be completely crippled if the FG deduct the huge amount from the bank accounts of the states.

Okutepa said the FG had revealed the plan to deduct the $418 million from the accounts of states every month as part of debts for contracts allegedly executed for the states.

He, however, said that the 36 states’ attorneys-general have read the purported judgment displayed by the FG and found that the states were not parties to the court action which resulted in the judgment debt.

After listening to the arguments of the 36 states, Ekwo retrained the FG from deducting from the states in respect of the purported court judgment until all issues relating to it were fully determined.

Defendants in the matter include attorney general of the federation, minister of finance, accountant general of the federation and all banks in Nigeria.

While adjourning the matter till November 30, Ekwo ordered the plaintiffs to serve all the relevant court processes on the defendants.

The controversial payment of $418 million to consultants over the Paris Club refund had become a contending issue between the three tiers of government.

Consultants had claimed the amount as a percentage for the payment of services rendered to the states and local government councils. But the amount did not go down well with the governors who requested a forensic audit over the claim made by consultants.

The Cable