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Socio-Economic Rights and Accountability Project (SERAP) has urged President Muhammadu Buhari to “issue an immediate moratorium on borrowing by the Federal Government and the 36 states to address a systemic debt crisis, prevent retrogressive economic measures, and the disproportionately negative impact of unsustainable debt on the poor Nigerians.”
The request followed the recent approval by the National Assembly of President Buhari’s request for a $5.8bn loan and grant of $10bn. Previous approvals in 2021 alone include $8.3bn; €490m, and $6.1bn. The foreign debt stock of the Federal Government, 36 states, and Federal Capital Territory reportedly stands at $37.9bn.
In an open letter dated December 18 and signed by deputy director Kolawole Oluwadare, SERAP said: “A moratorium on borrowing would create a temporary debt standstill, and free up fiscal space for investment in Nigerians’ needs, as well as ensure sustainable economic and social recovery from the COVID-19 pandemic.
“Without a moratorium on borrowing, your government and many of the 36 states may be caught in a process driven mostly by creditors’ needs. This will result in an exorbitant social cost for the marginalized and vulnerable sectors of the population.”
“Long-term unsustainable debt can be a barrier to the government’s ability to mobilize resources for human rights, and may lead to taxes and user fees that impact negatively on vulnerable and marginalised Nigerians.”
The letter, read in part: “SERAP is concerned about the lack of transparency and accountability in the spending of the loans so far obtained, and opacity around the terms and conditions, including repayment details of these loans.”
“While the National Assembly has asked for these details in future loan requests, it ought to have seen and assessed the terms and conditions of these loans before approving them, in line with its oversight responsibility under the Nigerian Constitution of 1999 [as amended].
“If not urgently addressed, the escalating borrowing and looming debt crisis would cripple the ability of both the Federal Government and the 36 states to deliver essential public services such as quality healthcare, education, and clean water to the most vulnerable and marginalised sectors of the population.
“SERAP notes that governments’ ability to protect human rights is inextricably related to the ability to spend needed resources. Growing debt burdens and debt repayment difficulties will have negative impacts on the ability of your government and many of the 36 states to fulfill the basic socio-economic rights of poor and vulnerable Nigerians.
“Sustainable debt management by the Federal Government and state governments will contribute to mobilizing resources for human rights and essential public services, and promote a culture of responsible borrowing.”
