The Socio-Economic Rights and Accountability Project (SERAP) has called on World Bank President, Ajay Banga, to conduct a thorough investigation into the spending of loans and other facilities by Nigeria’s 36 state governors. In a letter dated November 25, 2023, SERAP said loans and funding should be suspended if credible evidence of mismanagement or diversion of public funds emerges.
The organisation is contending that many of the country’s states are allegedly misusing public funds, including loans obtained from the World Bank and its partners, as well as federal government allocations. The total public debt portfolio for the 36 states and the Federal Capital Territory is reported to be N9.17 trillion, according to the Debt Management Office.
SERAP further urged the World Bank to halt any new loan applications and funding requests from the states until satisfactory explanations regarding the utilisation of previous loans and facilities are provided. SERAP expressed concern about the significant risk of mismanagement or diversion of funds linked to the Bank’s investments in several states.
In the letter signed by SERAP’s deputy director, Kolawole Oluwadare, the organisation stated, “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.”
SERAP has called for independent monitors to be sent to the 36 states to oversee the spending of loans and funding obtained from the World Bank and its partners, aiming to eliminate the risks of mismanagement or diversion of public funds by these states.
The World Bank currently has a portfolio of approximately $8.5 billion across Nigeria. Despite recent approvals of substantial loans, including a $750 million credit line for state reforms, SERAP has insisted on a commitment from Nigeria’s governors to address allegations of mismanagement and guarantees that funds will not be used for politicians’ luxurious lifestyles.
It warned of potential legal action if the World Bank fails to implement the recommendations outlined in the letter. Additionally, the group emphasised the World Bank’s legal obligations to observe and promote compliance with the Nigerian Constitution and domestic laws, including the Fiscal Responsibility Act of 2007.
The letter revealed alarming details of state expenditures, citing instances of frivolous spending, luxury items, and questionable allocations. SERAP stressed the need for the World Bank to ensure that any mismanaged or diverted public funds are returned to the treasuries of the states.
With Nigeria’s total public debt reaching N46.25 trillion or $103.11 billion in the fourth quarter of 2022, SERAP’s call for accountability and transparency in fund utilisation becomes even more crucial, especially considering the reported challenges faced by citizens in accessing basic public goods and services in various states.