SERAP tells World Bank to suspend loans to Nigeria’s 36 states over N87tn debts

Socio-Economic Rights and Accountability Project (SERAP) has urged the World Bank President Mr Ajay Banga to conduct an investigation into spending of loans and other facilities by Nigeria’s 36 state governors.

The group also called on the organisation to suspend any loans and funding if there is evidence of mismanagement or diversion of public funds by any of the states.

SERAP further urged the Bank to “suspend further applications for loans and any other funding to the 36 states until these states are able to satisfactorily explain details of spending of loans and other facilities obtained from the Bank and its partners.”

The group noted that 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 dated November 25, 2023 and signed by SERAP deputy director Kolawole Oluwadare, the organization 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.”

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SERAP said, “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, the 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.

“SERAP also urges you to demand expressed commitment from Nigeria’s 36 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.

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“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.

“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 N1.71tn on recurrent expenditures, including allowances, foreign trips, office stationery, and aircraft maintenance in the first nine months of 2023.

“In Lagos State, N440,750,000 was reportedly awarded to the Office of the Chief of Staff for the “procurement of a brand new bullet-proof Lexus LX 600 for use in the pool of the Office of Chief of Staff.” Some N2bn was also reportedly budgeted to buy rechargeable fans, rechargeable lights and fridge in the Office of the Deputy Governor.

“Imo State government reportedly spent N58.21bn on refreshments and meals, welfare packages, and other allowances. Jigawa State reportedly spent N49.64bn on transport and travelling, materials and supplies including drugs, vaccines, medical supplies, and stationeries.

“According to reports, Kaduna, Kano, Katsina, Kebbi, Kwara and Kogi states also respectively spent N27.87bn, N17.79bn, N40.49bn, N24.51bn, N41.19bn, and N58.02bn on frivolous items and the public funds may have been mismanaged or diverted”.

SERAP therefore noted that “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.