Spike in judgement debts worries Nigerian govt as cases triple within in nine years

The Central Bank of Nigeria (CBN) and the Federal Ministry of Justice are concerned about the growing burden of judgement debts on the federal government, with the number of cases against Ministries, Departments, and Agencies (MDAs) more than tripling since 2015.

They decided to reduce the growing number of garnishee cases, which, they said, threaten the funds available for federal government agencies’ development.

Speaking at the 2024 Roundtable with Legal Advisers of Federal Ministries, Departments, and Agencies in Abuja on Thursday, CBN Deputy Governor of Corporate Services, Bala Bello, expressed concern over the large number of garnishee cases against the federal government.

Mr Bala, who spoke through the Director of Legal Service, CBN, Kofo Salami-Alada, traced the increase in garnishee orders to the introduction of the Treasury Single Account (TSA) policy of the Federal Government in August 2015 and called for concerted efforts to handle the situation.

“It is also pertinent to point out that before 2015, the number of cases stood at 441and has since increased exponentially in terms of volume to 1,629 and also in financial value, post-2015.

“Our inquisition on this development revealed that the upturn was a result of apathy by most MDAs towards adequately defending their cases in Court, which in most cases will result in a judgment against the MDA.

“Following such a judgement, enforcement becomes the next cause of action, and this is where the CBN comes in,” he said.

He stated that to address the issues, stakeholders must demonstrate commitment towards the adoption of appropriate case management strategies and standardised practices across MDAs.

He added that the purpose of the meeting was to jointly come up with solutions to tackle the situation.

“We all know that our country, Nigeria, is faced with dwindling income and escalating expenditure. This also makes it imperative for us all to put on our thinking caps and participate actively in this session to safeguard the limited resources available to the country.”

“The CBN remains committed to playing its role as banker and providing economic and financial advice to the Federal Government”, he added.

Government agencies ignore court judgements

Court symbol 

CBN’s Legal Adviser and Director of Legal Services, Kofo Salami-Alado, pointed out that the lack of effort by MDAs in defending their court cases often leads to judgements against them, contributing to the increase in garnishee orders.

He also said non-compliance with court judgements by affected MDAs, without appealing the decisions or seeking a stay of execution.

“This attitude, if left unchecked, may not only impact on the ability of the MDAs to carry out its activities but would also contribute to a drain on the scarce resources of the Federal Government,” he said.

He said MDAs with separate Civil and Appeals Sections should coordinate, ensuring that they are notified immediately when a judgement is made against the MDA.

He urged that this would allow them to file the necessary processes while awaiting management’s approval.

He also suggested that actions be taken against legal officers when they lose cases assigned to them, adding that there should be incentives for quick resolution of cases.

“We, therefore, encourage participants to discuss their constraints in ensuring diligent handling of their substantive and garnishee matters, and to collectively provide practical measures to mitigate them,” he added.

Also speaking at the occasion, the Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, expressed happiness with the CBN, particularly its legal department, for this initiative and collaborative efforts with the Federal Ministry of Justice to rescue government agencies from mountains of judgement debts.

“Let me reiterate that as legal advisors to the government, we play a pivotal role in shaping the legal landscape of our nation, safeguarding the state’s assets, avoidance of undue embarrassment to government, and ensuring the smooth functioning of public services.

‘Our work touches every facet of public life, from reviewing and rendering appropriate and sound legal advice to defending the government’s interests in court. It is important to note that the quality of our work directly impacts the effectiveness and legitimacy of government actions,” said Mr Fagbemi, spoke through the Solicitor General of the Federation and Permanent Secretary, Federal Ministry of Justice, Beatrice Jedy-Agba.

He added, “Let me use this opportunity to state that the government will no longer condone instances of liability arising from compromises, lack of diligent prosecution/defence of cases, or sheer incompetence exhibited by attorneys acting on behalf of the government.

He noted government’s plan to reward diligence and apply appropriate sanctions to officers who have failed to live up to the ethics of both the profession and the public service.

He said the ministry has reached an advanced stage in developing an appeals policy, which will soon be made available to you all. It is pertinent for you all to familiarise yourself with the new appeal policy as soon as it is approved and ensure compliance thereto.

“This policy is designed to reverse the poor appeal culture in our MDAs, streamline and galvanize the conduct of interlocutory and substantive appeals by government entities. This will no doubt mitigate the government’s exposure to undue liabilities and enforcement actions in the face of scarce resources.

He stressed that diligent defence before the various trial courts is the key to avoiding liability to the government.

“As you are all aware, garnishee proceedings are a legitimate tool for debt recovery, but these can pose significant challenges if not handled with precision and legal acumen. In the context of government entities, these proceedings can impact public funds, essential services, and ongoing projects.

“It is expected that this training will also touch on the operation of the Treasury Single Account policy as it pertains to attachment of public funds,” Mr Fagbemi said.

“By mastering the intricacies of garnishee proceedings and applying sound legal principles, we can effectively protect government assets and minimize financial losses,” Mr Fagbemi said.

Meanwhile, the Director of Legal Services at the Centre for Civic Education, Agomuo Chimaobi, had called on federal government agencies to pay judgement debts.

He spoke on behalf of lawyers who had won cases against various agencies, explaining that the debts were hurting them financially, as they had used their own resources to handle the cases for their clients.

The debts, they said, stemmed from court rulings by the High Courts, Appeal Courts, and the Supreme Court.

“These judgement debts are compiled at the office of the Honourable Attorney General of the Federation and the Minister of Justice,” he said.

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There is a bill before the House of Representatives seeking to set guidelines for paying judgment debts owed by the Federal Government and its agencies, passing the bill through its second reading.

Sponsored by Miriam Onuoha, representing the Onuimo/Okigwe/Isiala Mbano Federal Constituency of Imo State, the bill is titled ‘A Bill for an Act to Provide Guidelines for the Payment of Judgment Debts Owed by the Federal Government and its Agencies, and for Other Related Matters.’