…Demands probe of loans in Nigeria
Socio-Economic Rights and Accountability Project, (SERAP), has urged the World Bank President, Ajay Banga, to promptly, transparently and effectively conduct an investigation into the spending of over $8.5 billion loans and other facilities by 36 State governors in Nigeria.
SERAP also urged the Bank to “suspend further applications for loans and any other funding to the 36 States until those States are able to satisfactorily explain details of spending of loans and other facilities obtained from the Bank and its partners”.
Many of the country’s 36 States are allegedly mismanaging public funds, which may include loans obtained from the Bank and its partners, and allocations from the Federal Government, which may also include loans obtained from the Bank.
In the letter by SERAP Deputy Director, Kolawole Oluwadare, dated November 25, 2023, the organisation said: “The World Bank and its partners cannot continue to give loans and other funding to these States where there are credible allegations of mismanagement or diversion of public funds.
“We are concerned that there is a significant risk of mismanagement or diversion of funds linked to the Bank’s investments in many of the country’s 36 States. It is neither appropriate nor responsible lending to give loans to these States only for the loans to be misspent”.
The letter, read in part: “The World Bank’s lending, and support for these states may create the impression of complicity in the allegations of mismanagement or diversion of public funds by the states which may include loans from the Bank and its partners, and federal allocations.
“We would consider the option of pursuing legal action should the World Bank fail, or fail to implement the recommendations contained in this letter, and we may join the country’s 36 States in any such suit.
“According to Nigeria’s Debt Management Office, total public debt portfolio for the country’s 36 States and the Federal Capital Territory is N9.17 trillion. The Federal Government’s total public debt portfolio is N78.2 trillion.
“We also urge you to demand expressed commitment from Nigeria’s 36 State governors to address credible allegations of mismanagement or diversion of public funds in their States, and provide guarantees that loans and funding from the Bank and its partners would not be used to fund the luxurious lifestyles of politicians.
“We urge the Bank to send independent monitors to the 36 States to monitor the spending of the loans and other funding obtained from the Bank and its partners, in order to remove the risks of mismanagement or diversion of public funds by these States.
“The World Bank and its partners need to make clear to Nigeria’s State governors that it would not tolerate any mismanagement, or diversion of public funds, by immediately suspending any pending loans and other funding to them until the allegations of mismanagement or diversion of public funds are investigated.
“The Bank has a legal responsibility to ensure that suspected perpetrators are brought to justice, and that any mismanaged or diverted public funds are returned to the treasuries of the States.
“Nigeria’s total public debt stock, including external and domestic debts, increased to N46.25 trillion or $103.11 billion in the fourth quarter of 2022. Many States reportedly owe civil servants’ salaries and pensions. Several States are borrowing to pay salaries. Millions of Nigerians resident in these States continue to be denied access to basic public goods and services such as quality education and healthcare.
“Meanwhile, several State governors are also reportedly spending public funds which may include funding obtained from the Bank and its partners and allocations from the Federal Government to fund unnecessary travels, buy exotic and bulletproof cars and generally fund the lavish lifestyles of politicians. The country’s 36 States have reportedly spent N1.71trillion on recurrent expenditures, including allowances, foreign trips, office stationery, and aircraft maintenance in the first nine months of 2023.
“Section 41 of the Fiscal Responsibility Act provides that ‘Government at all tiers shall only borrow for capital expenditure and human development.
“The World Bank and its partners have obligations under international anti-corruption and human rights law, including a responsibility to promote transparency and accountability in the management of public funds, prevent mismanagement or diversion of public funds, and redress any abuse of public trust that they may have contributed to.
“As a UN specialised agency, the World Bank also has an obligation to promote transparency and accountability in the management of public resources and effective implementation of the UN Convention against corruption, to which Nigeria is a State party”.
