Home Economy SERAP Tells World Bank to Suspend Loans to States Over Misspending 

SERAP Tells World Bank to Suspend Loans to States Over Misspending 

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The Socio-Economic Rights and Accountability Project, SERAP, yesterday, urged the World Bank President, Mr Ajay Banga, to suspend issuing loans to Nigeria’s 36 states over allegations of mismanaging public funds, including loans obtained from the institution.

It also urged the World Bank to probe the spending of over $8.5 billion in loans and other facilities by the 36 state governors in Nigeria.

SERAP, in a statement by its Deputy Director, Kolawole Oluwadare, 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, the total public debt portfolio for the country’s 36 states and the Federal Capital Territory is N9.17 trillion. The Federal Government’s public debt portfolio is N78.2 trillion.

“We also urge 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.

“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 to remove the risks of mismanagement or diversion of public funds by these states.

“The World Bank currently has a portfolio of about $8.5 billion spread across the country. The bank has also approved several loans and other funding facilities to the country’s 36 states, including the recent $750 million credit line meant for the states to carry out reforms to attract investment and create jobs.

“The accounts of Nigeria’s 36 states are generally not open to public scrutiny as many of them continue to refuse freedom of information requests seeking transparency and accountability in the spending of public funds.

“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.”

(Vanguard)

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