Suspend further loans to Nigerian states, SERAP writes World Bank

The World Bank has been requested by the Socio-Economic Rights and Accountability Projects (SERAP) to immediately halt any additional loans to the states until they provide an explanation for the use of previously obtained loans. The group also demanded an investigation into the loans that Nigerian state governors had taken out.

The demand was made by SERAP’s deputy director, Kolawole Oluwadare, in a letter to World Bank President Ajay Banga. SERAP asserted that the 36 states had mismanaged and diverted public funds, raising concerns about their rising debt profiles and emphasizing that it would be reckless to keep lending money to them. The Nigerian states’ decision to approach the World Bank for financial assistance highlights the challenges they face in managing their budgets and funding development projects.

SERAP also disclosed that Nigeria’s 36 states have reportedly spent N1.71 trillion on recurrent expenditures from January to September 2023, noting that if the World Bank failed to probe the state governors, it would not hesitate to institute legal actions against the lending body and the 36 states.

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“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. ‘’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.

“The World Bank’s lending and support for these states may create the impression of complicity in the allegations of mismanagement or diversion of public funds by the states, which may include loans from the Bank and its partners and federal allocations. We would consider the option of pursuing legal action should the World Bank fail or fail to implement the recommendations contained in this letter, and we may join the country’s 36 states in any such suit.

SERAP listed some states with questionable implementation of funding as Abia, Akwa Ibom, Adamawa, Anambra, Bauchi, Bayelsa, Lagos, Benue, Imo, and Ekiti.


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