THE Socio-Economic Rights and Accountability Project (SERAP) has called on the World Bank to suspend any disbursement of the $800 million loan being requested by the President Muhammadu Buhari administration.
They had reported that Buhari had earlier this week submitted a letter to the Nigerian senate requesting an approval for the loan.
The President had in the letter stated that the money, when approved, would be used to alleviate the negative impacts of fuel subsidy removal, which his government has refused to remove but left alone for the next administration.
Buhari claimed the loan facility was intended to be used to support poor Nigerians, and would be disbursed to poor households across the country.
He also claimed that the facility was an extension of the unconditional cash transfer being implemented by the Federal government.
The President stated that the funds, when approved, would be sent to the bank accounts of the identified beneficiaries.
He also said the Federal Executive Council (FEC) had approved his request for obtaining the loan, noting that he was waiting for the approval of the Senate before going ahead with processing the loan.
However, SERAP, in a letter dated May 13, 2023 to the World Bank president, David Malpass, urged the the bank to seek clarification from the incoming administration on the use of the loan, as Buhari’s term ends in May 2023.
The SERAP letter, signed by its deputy director, Kolawole Oluwadare, urged the bank to comply with its own Articles of Agreement and not sacrifice international standards in the rush to release the loan.
The organization expressed concern that the government was seeking to spend the loan when it has barely two weeks to leave office, and when the project objectives and intended purposes for which the loan is meant for remain unclear.
While expressing concerns about the crippling debt burden on Nigeria and its disproportionate negative impact on poor Nigerians, SERAP appealed to the World Bank not to close its eyes to the important transparency, accountability, and human rights issues related to the loan.
SERAP noted the lack of transparency and accountability in the spending of the loans the Federal government had obtained so far.
It argued that the bank has a responsibility to ensure that the Federal government is transparent and accountable to Nigerians in any discussion to obtain loans, credits or grants from the bank, and how it spends any approved loans, credits, or grants.
“The Bank’s power to provide loans is coupled with a fiduciary responsibility to ensure that the spending of such funds by the government meets international standards of transparency and accountability, including those entrenched in article 5 of the UN Convention against Corruption.
“The World Bank should also seek transparency and accountability commitments if the incoming government decides to use the loan to implement the National Social Safety Net Programme because the spending on the programme has been mostly shrouded in secrecy,” the letter read.
SERAP urged the World Bank to insist on accessing information on the spending by the government on the National Social Safety Net Programme since 2015, and to ensure the publication of the details of such spending in any future engagements with the incoming government.
It also highlighted Article 1 of the World Bank Articles of Agreement, which states that the Bank is to assist in the reconstruction and development of member countries.
The organization argued that the Bank should be guided in all its decisions by the purposes stated in the Articles of Agreement.
SERAP also cited Article 3 Section 4(vii) of the World Bank Articles of Agreement, which states that loans made or guaranteed by the bank shall be for the purpose of specific projects of reconstruction or development.
According to the organization, Article 3 Section 5(b), states that the bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted.
Experts have expressed concerns about Nigeria’s rising debts, which currently stands at N46.25 trillion or $103.1 billion in December 2022, according to the Debt Management Office (DMO).
The DMO, while giving the breakdown, stated that there was an increase of over N7 trillion from what the country owed in 2021.
Nigeria’s debts hit N68.95 following the recent Senate approval for Buhari to securitize the N22.7 trillion owed to the Central Bank of Nigeria (CBN).