The Central Bank of Nigeria, CBN and the Federal Ministry of Justice have resolved to tackle the rise in judgment debts against Ministries, Departments and Agencies, MDAs of the federal government.
They made the resolution so as to curtail the sporadic rise in garnishee cases threatening the availability of funds for development of the federal government agencies.
Speaking at a the 2024 Roundtable with Legal Advisers of Ministries, Departments and Agencies of the Federal Government on Thursday in Abuja, the Deputy Governor, Corporate Services of the CBN, Dr Bala Mohammed Bello expressed worries over the huge number of garnishee proceedings against the federal government.
Bala who spoke through the Director Legal Service, CBN, Mr 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 prior to 2015 the number of cases stood at 441 (Four Hundred and Forty-One) and has since increased exponentially in terms of volume to 1629 (One Thousand Six Hundred and Twenty-Nine), 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 judgement against the MDA.
“Following such a judgment, enforcement becomes the next cause of action, and this is where the CBN comes in”, the deputy governor said.
He stated that to address the issues, stakeholders must demonstrate a commitment towards the adoption of appropriate case management strategies and standardized practices across MDAs, adding that the purpose of the Round Table 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 in order 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.
In his paper, the Legal Adviser/ Director, Legal Services Department of the CBN, Mr Kofo Salami-Alado identified the continued display of apathy by MDAs towards putting up robust defence in respect of their cases in Court which inevitably culminates in judgments being given against them as one of the factors excercibating garnishee orders.
The order he said, is the Non-compliance with the judgments of the courts without appeal against same by affected MDAs, (i.e. without entering appeals against the substantive suits and or obtaining stay of execution.)
“This attitude, if left unchecked, may not only impact on the ability of the MDA to carry out its activities, but would also contribute to a drain on the scarce resources of the Federal Government”, he said.
To remedy the situation he called on MDAs whose legal departments are structured in such a manner that the Civil Section is distinct from the Appeals Section, to synergize between both sections, such that when there is a judgment against the MDA, the appeal section is immediately put on notice to file relevant processes whilst management’s approvals are being awaited.
He also suggested that actions be taking 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 and Minister of Justice AGF, Prince Lateef Fagbemi SAN expressed happiness with the Central Bank of Nigeria, particularly the legal department of the Bank for this initiative and collaborative efforts with the Federal Ministry of Justice to rescue government agencies from mountains of judgment 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 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.
Fagbemi spoke through the Solicitor General of the Federation and Permanent Secretary, Federal Ministry of Justice, Mrs Beatrice Jedy-Agba.
He said “In today’s rapidly evolving legal landscape, it is imperative that we remain at the forefront of legal innovation, knowledge, and best practices.
“It is important for you to provide exceptional legal services by approaching each case with diligence, professionalism, high ethics, integrity, and commitment to upholding public policy. Our conscience must be guided always by the adverse impact of our actions on the government and the citizens who bear the ultimate loss.
“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 government.
‘While we will take measures to recognize and reward diligence, we will not hesitate to apply appropriate sanctions to officers who have failed to live up to the ethics of both the profession and the public service.
“The Ministry has reached an advance 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 government’s exposure to undue liabilities and enforcement actions in the face of scarce resources.
May I reiterate clearly again that diligent defence before the various trial courts is the key to avoidance of liability to government. It is trite that the pendency of an appeal does not operate as an automatic stay of execution; this is underscored by our experiences in recent times where government is hamstrung by the requirement to deposit huge sums in court as a condition for stay of execution or prosecuting an appeal.
“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.
‘It is noted that there is no finality yet to the raging legal debate and judicial decisions on the appropriateness and scope of application of Section 84 of the Sheriffs and Civil Process Act on the requirement of Attorney-General’s consent as a condition precedent for the attachment of government funds.
I also observe that a preponderance of contemporary judicial decisions by the Court of Appeal are to the effect that the Central Bank of Nigeria is not a public officer, hence funds in its custody does not require consent of the Attorney-General prior to attachment.
The foregoing notwithstanding, the safety net under section 84 remains our first line of defence in garnishee proceedings except in cases falling within the context of the exceptions created in the Supreme Court judgment in the CBN v. Interstellar case, that is, where the Attorney-General is a judgment debtor or part payment of the judgment debt has been made.
“By mastering the intricacies of garnishee proceedings and applying sound legal principles, we can effectively protect government assets and minimize financial losses.
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