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Suspend loans to states, SERAP urges World Bank

Published by Fakinlede Tope John on November 27th, 2023.

Suspend loans to States Government, SERAP urges World Bank

The Socio-Economic Rights and Accountability Project has urged the World Bank to halt loans to Nigeria’s 36 states, citing allegations of mismanagement of public funds.

The National Bureau of Statistics revealed that each Nigerian carries a debt of N396,376.19. Nigeria’s total public debt surged by 75.27 per cent, reaching N87.38tn in Q2 2023.

SERAP, in a letter called on the World Bank to investigate state governors’ spending, advocating for loan suspension if evidence of mismanagement surfaces.

The group also seeks a freeze on further loan applications until states transparently explain previous fund utilization.

SERAP’s Deputy Director, Kolawole Oluwadare, made the call on Sunday.

It also asked the global lender to “suspend further applications for loans and any other funding to the 36 states until these states can satisfactorily explain details of spending of loans and other facilities obtained from the Bank and its partners.”

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 statement read.

“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.”

Referring to data from Nigeria’s Debt Management Office, SERAP highlighted that the combined public debt of the country’s 36 states and the Federal Capital Territory amounts to N9.17tn.

Additionally, the group noted the Federal Government’s total public debt stands at N78.2tn.

SERAP called on the World Bank’s chief to seek a clear commitment from Nigeria’s 36 governors to address credible allegations of mismanagement or diversion of public funds within their respective states.