The Socio-Economic Rights and Accountability Projects (SERAP) has urged the World Bank to investigate loans obtained by Nigeria’s 36 state governors, advocating an immediate suspension of additional loans until they provide an account of previous loan utilization. Concerns have arisen over the spending patterns in some states, particularly regarding running costs.
In a letter addressed to World Bank President Ajay Banga, SERAP’s Deputy Director, Kolawole Oluwadare, emphasized the need for scrutiny due to the rising debt profile of the states. Allegations of mismanagement and diversion of public funds by the states led SERAP to argue against further lending, suggesting that it would be irresponsible to continue providing loans without accountability.
SERAP 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.” The group expressed concern about the potential complicity of the World Bank in mismanagement or diversion of funds if they continue to lend without addressing the allegations.
The letter highlighted Nigeria’s total public debt portfolio, noting that the country’s 36 states and the Federal Capital Territory have a combined debt of N9.17tn, with the federal government’s total public debt portfolio at N78.2tn.
SERAP called on the World Bank to utilize its legal powers to send independent monitors to states that received loans, ensuring transparent use of the funds. The group also urged the World Bank to demand commitments from the governors to address allegations of mismanagement and assure that funds wouldn’t be used for luxury lifestyles.
The World Bank, with an $8.5bn portfolio across Nigeria, faces the responsibility to promote compliance with the Nigerian Constitution and domestic laws, including the Fiscal Responsibility Act of 2007, according to SERAP.
