SERAP writes World Bank to suspend Nigeria’s loan that will pile on debt
By Jeph Ajobaju, Chief Copy Editor
Socio-Economic Rights and Accountability Project (SERAP) has written to the World Bank to suspend disbursement of Nigeria’s latest $800 million loan which President Muhammadu Buhari has asked lawmakers to approve for spending.
SERAP urged World Bank President David Malpass Malpass and the bank to reopen discussion on the loan with the incoming administration, to clarify details on rationale and use of the facility because Buhari’s tenure ends on 29 May.
Social Development Integrated Centre (Social Action), a non-governmental organisation in the Niger Delta, has also implored the Senate to “immediately reject Buhari’s request to borrow $800 million from the World Bank … to prevent funds diversion, embezzlement and plundering of scarce foreign exchange [forex], while the country is plunged further into a debt trap.”
The government in April announced plan to spend the loan as “part of its subsidy palliatives measures”. Buhari last week requested Senate’s approval for the credit.
A letter dated May 13 written by SERAP Deputy Director Kolawole Oluwadare urged the World Bank to comply with its own Articles of Agreement in disbursing any loans.
“The Bank should not sacrifice international standards in the rush to disburse the loan to the government,” Oluwadare pleaded.
“Suspending any disbursement to the government,” he stressed, would reduce risks and vulnerability to corruption and mismanagement.
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No satisfactory justification for new loan
SERAP insisted the government has not satisfactorily explained or justified the need for the loan at this time, especially given a lack of clarity on its use, a crippling debt burden, and disproportionately negative impact of retrogressive measures on poor Nigerians, according to reporting by The Guardian.
“The World Bank cannot close its eyes to these important transparency, accountability and human rights issues.
“The National Economic Council (NEC), on April 27, reportedly suspended the planned removal of subsidy on petroleum products at the end of the Buhari administration,” SERAP added.
It threatened to take legal action if the World Bank refuses to suspend disbursement of the loan.
“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.”
SERAP argued there is a lack of transparency and accountability in the spending of the loans Nigeria has obtained so far.
“The details of the projects on which approved loans are spent are often shrouded in secrecy.
“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.”
