Suspend $800m Loan Disbursement, SERAP ourges W’Bank

The Socio-Economic Rights and Accountability Project has urged the World Bank “to suspend any disbursement of the $800m loan to the Federal Government and to request the incoming administration to provide satisfactory explanations for the loan.”

Noting that the regime of the President, Major General Muhammadu Buhari (retd.), will wind down by May ending, SERAP urges World Bank President, Mr David Malpass, “to reopen discussion” to clarify the rationale and use of the loan in the twilight of Buhari’s regime.

the Minister of Finance, Budget and National Planning had, last week, revealed to State House correspondents that the Federal Government had secured $800m loan from the World Bank to provide post-petroleum subsidy palliatives for over 50 million Nigerians ahead of the proposed June 2023 removal of subsidy.

In a letter dated May 13, 2023, and signed by SERAP Deputy Director, Kolawole Oluwadare, the group said, “The World Bank should comply with its own Articles of Agreement in disbursing any loans. The bank should not sacrifice international standards in the rush to disburse the $800m loan to the government,” adding that, “Suspending any disbursement of the loan to the government would reduce the risks and vulnerability to corruption and mismanagement.

SERAP said it was concerned that the Buhari-led FG 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 reportedly approved and will be disbursed remain unclear.

“The government has not satisfactorily explained or justified the need for the loan at this time, especially given the lack of clarity on its use and the crippling debt burden, and the disproportionately negative impact of these retrogressive measures on poor Nigerians.

SERAP urged the World Bank not to “close its eyes to these important transparency, accountability, and human rights issues,” noting that the National Economic Council, on April 27, reportedly suspended the planned removal of subsidy on petroleum products by the end of Buhari’s regime

The organisation threatened to seek legal redress “should the World Bank refuse to suspend the disbursement of the loan to the Federal Government and to implement the other recommendations contained in this letter, and we may join the government in any such suit

The human rights group added that, “The crippling debt burden is a human rights issue because when the entire country is burdened by unsustainable debts, there will be little money left to ensure access of poor and vulnerable Nigerians to legally enforceable socio-economic rights

It also alleged that “There is also a lack of transparency and accountability in the spending of the loans so far obtained. The details of the projects on which approved loans are spent are often shrouded in secrect.

“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”