Fuel subsidy: Suspend disbursement of $800m loan to FG, SERAP tells W’Bank
Socio-Economic Rights and Accountability Project (SERAP) has urged the World Bank President, David Malpass, to suspend the disbursement of $800million loan secured by the Federal Government to cushion the effect of fuel subsidy removal on the poor and vulnerable and to request the incoming administration to provide satisfactory explanations for the loan.
The group also urged Malpass and the World Bank to reopen discussion on the reportedly approved $800million loan with the incoming administration to clarify details on the rationale and use of the loan given that the term of office of President Muhammadu Buhari-led government ends in May 2023.
The Federal Government in April announced plans to spend the $800 million loan as ‘part of its subsidy palliatives measures’. Also, last week, President Buhari requested the Senate’s approval for the World Bank loan. It is unclear whether the request to the Senate is for a fresh loan or the one announced in April.
Nevertheless, SERAP in the letter dated May 13 by its Deputy Director, Kolawole Oluwadare said: “The World Bank should comply with its own Articles of Agreement in disbursing any loans. The Bank should not sacrifice international standards in the rush to disburse the $800m loan to the government.”
SERAP said suspending the disbursement of the loan would reduce risks and vulnerability to corruption and mismanagement.
It said: “SERAP is concerned that the government is seeking to spend the loan when it has barely two weeks to leave office and when the project objectives and intended purposes for which the loan is reportedly approved and will be disbursed remain unclear. The government has not satisfactorily explained or justified the need for the loan at this time, especially given the lack of clarity on its use and the crippling debt burden, and the disproportionately negative impact of these retrogressive measures on poor Nigerians.
“The World Bank cannot close its eyes to these important transparency, accountability and human rights issues. We would consider the option of pursuing legal action should the World Bank refuse to suspend the disbursement of the loan to the Federal Government and to implement the other recommendations contained in this letter, and we may join the government in any such suit.
“The crippling debt burden is a human rights issue because when the entire country is burdened by unsustainable debts, there will be little money left to ensure access of poor and vulnerable Nigerians to legally enforceable socio-economic rights.
“There is also a lack of transparency and accountability in the spending of the loans so far obtained. The details of the projects on which approved loans are spent are often shrouded in secrecy. The Bank has a responsibility to ensure that the Federal Government is transparent and accountable to Nigerians in any discussion to obtain loans, credits or grants from the bank and how it spends any approved loans, credits or grants.”
