Friday, 6 September 2019

Financial squeeze: CAF withholds payments to nations and clubs

Prize money due to the top three teams at the last Africa Cup of Nations (AFCON) Final in Egypt is yet to be paid in full.

The Nigeria Football Federation (NFF), which is due a payment of $2 millon – for reaching the semi-finals – has received only $600,000, since beating Tunisia on July 18, in the tournament’s third-place match.

In a letter written to the NFF by the Confederation of African Football (CAF) in mid-August, which has been seen by Insideworldfootball, a payment of $800,000 was made, which consisted of a $600,000 AFCON payment, with the remaining $200,000 being the annual grant for member associations due from CAF.

“We have written to CAF, asking for clarifications on the money that was paid to us,” an authoritative NFF source told Insideworldfootball.

“It is quite odd that it is getting close to two months since we played at the AFCON in Egypt and we are yet to receive our prize money. It is a rather unusual situation for which we require an explanation.”

Reports from winners Algeria and Tunisia, which placed fourth, both due the sums of $4.5 million and $2 million, also indicate that they haven’t been paid in full.

The situation with the AFCON teams reflects an even worse situation for Esperance Sportive de Tunis, the current holders of the Champions League.

They are yet to receive their winners’ cheque of $2.5 million, despite being awarded the title by CAF’s Disciplinary Committee in August, after Morocco’s Wydad abandoned the May 31 final at Rades.

According to CAF, the payment is not due, as Wydad is currently appealing against the decision of the Disciplinary Committee (DC).

But this flies against normal judicial procedures, which makes the decision of the DC substantive – on which CAF must fully act – until there is a higher judicial verdict, negating the DC’s decision.

The health of CAF’s finances were put into serious question recently, after a warning that Morocco’s controversial Fouzi Lekjaa, who chairs its finance committee, gave to his colleagues.

In the confidential minutes of CAF’s 19 June Executive Committee meeting, in the possession of this reporter, Lekjaa stated “CAF has entered a cycle of structural deficit that will reach about $6m at the end of the year (2019).”

“If this deficit is not corrected, it WILL LEAD TO THE CONSUMPTION OF FINANCIAL RESERVES AND THE DEFICIT WILL REACH TO THE POINT OF REACHING $120m after ten years,” his committee warned.

“This assertion [of Lekjaa] is correct,” says Andrew Kamanga, president of the Football Association of Zambia, who is a chartered accountant, said in July.

“Deficit is a function of generating less income against higher expenses. Deficit impacts on reserves, so it’s therefore important that in any financial cycle the income generated should be higher than expenses, so that you avoid drawing on reserves.

“The issue at hand is to relook at the income to be generated and match the costs and expenses in the same financial year to accommodate a small surplus since by nature, football confederations are not judged on profitability.

“They should generate enough income to cover the football related costs, including investment in infrastructure,” Kamanga, who is also a member of FIFA’s Audit and Compliance Committee, advised.

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