The Federal High Court in Lagos on Wednesday ordered the Zamfara State government to pay Ecobank Nigeria Limited N3.1billion.
Justice Okon Abang directed the Central Bank of Nigeria (CBN), the Ministry of Finance and Accountant-General of the Federation to deduct the sum from money accruable to the state from the Federation Account and remit to the bank.
The state is also to pay interest on the sum at 30 per cent per annum from March 1, 2013 when the suit was filed, until Wednesday (when judgment was delivered).
In addition, the state must pay 10 per cent interest on the judgment sum until it is finally liquidated.
The judge awarded N50,000 to the bank as cost of prosecuting the suit.
He directed the Attorney-General of Zamfara, it’s finance ministry, Ministry of Finance, Accountant-General, Attorney-General of the Federation and CBN “to ensure the full and effectual compliance with the judgment.”
Justice Abang held that the sum of N3, 159,017,740.71 was the outstanding indebtedness on a facility of N1.5billion extended to Zamfara State by Oceanic Bank Plc, which was consolidated with Ecobank.
Ecobank, in its claims, said the state’s Executive Council passed a resolution authorising its finance ministry to accept the loan on Zamfara’s behalf.
It said the major security for the disbursement of the loan facility was a conditional Irrevocable Standing Payment Order (ISPO) from the state’s Value Added Tax (VAT) account domiciled with First Bank, Gusau Branch.
Ecobank said the facility suffered a setback when First Bank “stopped the warehousing of state Federation Account Allocation Committee (FAAC) and consequently declined further remittance for the payment of the indebtedness that arose from the subject facility.”
An agreement was subsequently reached to restructure the debt in November 2010, after which the state “honoured rentals for few months.”
“However, the rentals till date have not been paid by Zamfara State government despite the fact that same have fallen due,” the bank said.