The Socio-Economic Rights and Accountability Project (SERAP) has urged the President of the World Bank, David Malpass, to use his good office to suspend any disbursement of the $800 million loan to the federal government and to request that the incoming administration provide satisfactory explanations for the loan.
SERAP also urged Malpass and the World Bank to reopen discussions with the incoming administration regarding the reportedly approved $800 million loan in order to elucidate the loan’s rationale and intended use, as President Muhammadu Buhari’s term ends in May 2023.
In April, the federal government declared its intention to use the $800 million loan as “part of its subsidy palliatives.”
In addition, President Buhari requested Senate sanction for a loan of $800 million to fund the National Social Safety Network Programme last week.
SERAP stated in a letter dated 13 May 2023 and signed by its Deputy Director Kolawole Oluwadare that the World Bank should comply with its own Articles of Agreement in disbursing any loans, despite the fact that the federal government had clarified that it was not seeking another $800 million loan from the World Bank to cushion the impact of the impending removal of petroleum subsidies on vulnerable Nigerians.
According to the organisation, the Bank should not compromise international standards in its haste to lend the Nigerian government $800 million.
Therefore, SERAP advised that suspending any loan disbursement to the government would reduce corruption and mismanagement risks and vulnerabilities.
The letter stated, in part, that “SERAP is concerned that the government is attempting to spend the loan with less than two weeks remaining in office, while the project objectives and intended purposes for which the loan has reportedly been approved and will be disbursed remain unclear.”
“The government has not adequately explained or justified the need for the loan at this time, particularly given the lack of clarity on its use, the crippling debt burden, and the disproportionately negative impact of these regressive measures on impoverished Nigerians.
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