The Reasons The World Bank Should Stop Lending To The 36 States In Nigeria - SERAP

  The Reasons The World Bank Should Stop Lending To The 36 States In Nigeria - SERAP The Socio-Economic Rights and Accountability Project (S...

 The Reasons The World Bank Should Stop Lending To The 36 States In Nigeria - SERAP

The Socio-Economic Rights and Accountability Project (SERAP) has urged Mr. Ajay Banga, President of the World Bank, to investigate how the 36 state governors of the nation have spent loans and other facilities in a timely, transparent, and effective manner. The project also requests that all loans and funding be suspended "if there is relevant admissible evidence of mismanagement or diversion of public funds by any of the states."

The group also urged the Bank to halt further applications for loans and other funding to the 36 states until these states are able to satisfactorily explain details of spending of loans and other facilities obtained from the Bank and its partners, in a letter dated November 25, 2023, and signed by SERAP deputy director Kolawole Oluwadare.

Allegations have been made that numerous states in the nation are mismanaging public finances, including loans from the Bank and its partners as well as allocations from the Federal Government, which may also involve loans from the Bank.

According to SERAP, in cases where there are solid claims of mismanagement or the diversion of public funds, the World Bank and its partners are unable to continue providing loans and other forms of support to these states.

The group claims that they are worried about the substantial danger of improper handling or money being diverted from investments made by the Bank in many of the 36 states in the nation.

According to SERAP, sending money to these states only to have it mismanaged is not appropriate nor responsible.

A portion of the letter stated: "The lending and support provided by the World Bank to these states could give the perception that the Bank and its partners, as well as federal allocations, are involved in the claims made by the states about mismanagement or the diversion of public monies.

Should the World Bank be unable or unwilling to carry out the suggestions in this letter, we would take the possibility of filing a lawsuit, in which case we may represent the 36 states of this nation.

The overall public debt portfolio for the 36 states and the Federal Capital Territory of Nigeria is N9.17 trillion, according to the Debt Management Office of the country. The entire amount of public debt held by the federal government is N78.2 trillion.

"SERAP also impels you to seek a clear commitment from Nigeria's 36 governors regarding the handling of plausible claims of financial mismanagement or diversion of public funds in their states, as well as assurances that funds and loans from the Bank and its associates won't be utilised to finance the opulent lifestyles of politicians.

In the first nine months of 2023, the 36 states in the nation are said to have spent N1.71 trillion on recurrent expenses, such as allowances, overseas travel, office supplies, and aircraft upkeep.

According to reports, the administration of Abia State spent N223,389,889.84 on "refreshments and meals" and N397,520,734.84 on "feeding and welfare."

In the first two quarters alone, the Akwa Ibom State government is said to have spent N92.54 billion on allowances and social contributions, social benefits, travel and transportation, utilities like electricity chargers and Internet access fees, and materials and supplies like office supplies, medications, lab and medical supplies, maintenance and training.

Additionally, it is stated that the government has paid N841.83 million for meeting entertainment and N10 million for hosting and organising political associations and interest groups.

As of the end of the third quarter of 2023, it is stated that the Adamawa State government had spent N40.90 billion on non-salary expenses. These expenses included furniture allowance, domestic and international travel and training, office supplies and consumables, refreshments, and meals.

"As of the end of the second quarter of 2023, the Anambra State government also reportedly spent N15.17 billion on frivolous items." The government of Bayelsa State reportedly spent N58.26 on travel, welfare packages, burial arrangements, meeting costs, "praise night/thanksgiving expenses," and "marriage ceremony support," while the government of Bauchi State reportedly spent N70.25 billion on frivolous stuff.

By immediately suspending any pending loans and other funding to Nigeria's state governors until the claims of mismanagement or diversion of public funds are investigated, the World Bank and its partners need to make it clear to them that they will not tolerate any mismanagement or diversion of public funds.

Legally speaking, the Bank must make sure that anyone accused of wrongdoing are prosecuted and that any misappropriated or mishandled public monies are repaid to state treasuries.

The Nigerian Constitution of 1999 [as modified] and national legislation, such as the Fiscal Responsibility Act of 2007, are legally binding on the World Bank, and they must be followed.

In the fourth quarter of 2022, Nigeria's entire public debt stock—which includes both domestic and foreign debts—rose to N46.25 trillion, or $103.11 billion.

It is said that several states owe the salary and pensions of their civil personnel. Many states are taking out loans to cover their payroll. These states still deny millions of Nigerians access to essential public goods and services like adequate healthcare and education.

According to reports, a number of state governors are also using public monies—which could come from the Federal Government, the Bank, and its partners—to pay for pointless trips, purchase expensive and bulletproof vehicles, and generally support the opulent lifestyles of politicians.

In the first nine months of 2023, the 36 states in the nation are said to have spent N1.71 trillion on recurrent expenses, such as allowances, overseas travel, office supplies, and aircraft upkeep.

According to reports, the administration of Abia State spent N223,389,889.84 on "refreshments and meals" and N397,520,734.84 on "feeding and welfare."

In the first two quarters alone, the Akwa Ibom State government is said to have spent N92.54 billion on allowances and social contributions, social benefits, travel and transportation, utilities like electricity chargers and Internet access fees, and materials and supplies like office supplies, medications, lab and medical supplies, maintenance and training.

Additionally, it is stated that the government has paid N841.83 million for meeting entertainment and N10 million for hosting and organising political associations and interest groups.

As of the end of the third quarter of 2023, it is stated that the Adamawa State government had spent N40.90 billion on non-salary expenses. These expenses included furniture allowance, domestic and international travel and training, office supplies and consumables, refreshments, and meals.

"As of the end of the second quarter of 2023, the Anambra State government also reportedly spent N15.17 billion on frivolous items." The administration of Bayelsa State reportedly spent N58.26 on travel, welfare packages, funeral arrangements, meeting costs, "praise night/thanksgiving expenses," and "marriage." In contrast, the government of Bauchi State reportedly spent N70.25 billion on frivolous stuff.

The Office of the Chief of Staff in Lagos State reportedly received N440,750,000 for the "acquisition of a brand new bullet-proof Lexus LX 600 for use in the Office of Chief of Staff pool." It was also claimed that the Office of the Deputy Governor had budgeted N2 billion for the purchase of refrigerators, lighting and fans that could be recharged.

According to reports, the Benue State government spent N34.44 billion on "special day celebrations," "welfare packages," "security votes," and supplies and materials including books and office supplies.

Reports claim that public monies may have been wasted or misappropriated, and that Borno, Cross Rivers, Delta, and Ebonyi states spent N32.63 billion, N43.71 billion, N152.15 billion, N30.91 billion, and N41.11 billion on frivolous products, respectively.

According to reports, Ekiti State paid N31.33 billion for domestic and international travel, transportation, and other incidental expenses including refreshments, honoraria, welfare packages, and sitting allowances. Reports claim that the states of Enugu and Gombe spent N33.36 billion and N24.73 billion, respectively, on unnecessary goods, and it's possible that public monies were misappropriated or mishandled.

According to reports, the Imo State government spent N58.21 billion on food and drink, welfare benefits, and other benefits. According to reports, Jigawa State spent N49.64 billion for materials and supplies, including medications, vaccines, medical equipment, and stationery, as well as travel and transportation.

Reports say that N40.49 billion, N40.49 billion, N24.51 billion, N41.19 billion, and N58.02 billion were spent on frivolous products by the states of Kaduna, Kano, Katsina, Kebbi, Kwara, and Kogi, respectively. It is possible that these public monies were mismanaged or misappropriated.

The Fiscal Responsibility Act's Section 41 states that borrowing by the government at all levels may only be done for capital projects and human development.

A cost-benefit analysis outlining the financial and social advantages of the purpose for which the intended borrowing is to be applied must be presented by any government in the Federation, as well as its agencies and corporations, in order to obtain borrowing authorization under Section 44 of the Fiscal Responsibility Act.

"Before lending to any Government in the Federation, all banks and financial institutions shall request and obtain proof of compliance with the provisions of this Part," states Section 45. 2) It is illegal for banks and other financial organisations to lend money in violation of this part.

Under international human rights and anticorruption law, the World Bank and its partners are obligated to address any misuse of public trust that they may have contributed to, prevent mismanagement or diversion of public funds, and encourage accountability and transparency in the management of public funds.

In addition, the World Bank has a duty as a UN specialised agency to advance accountability and openness in the administration of public funds and the successful execution of the UN Convention against Corruption, to which Nigeria is a signatory.

Additionally, the executive directors of the World Bank are responsible for making sure that the Bank's policies and choices align with both their own bylaws and the responsibility of countries to be transparent and accountable.