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SERAP Urges World Bank to Reject States’ New Loan Applications

The Socio-Economic Rights and Accountability Project (SERAP) has called on the World Bank to immediately halt further loans to Nigerian states until a transparent account is provided for the utilization of previously obtained loans. The group also advocates for an investigation into the loans acquired by state governors in Nigeria. In a letter directed to Ajay Banga, the President of the World Bank, SERAP’s deputy director, Kolawole Oluwadare, expressed concerns about the escalating debt levels of the 36 states and alleged mismanagement and diversion of public funds. The organization contends that it would be irresponsible to continue extending loans to states with such allegations.

SERAP emphasized that if the World Bank fails to investigate the state governors, legal actions may be pursued against both the lending body and the 36 states. The group asserts that lending to states facing credible allegations of fund mismanagement or diversion is neither appropriate nor responsible. SERAP urged the World Bank to utilize its legal authority to deploy independent monitors to states that have received loans and ensure transparency in fund utilization. The organization also called for an explicit commitment from Nigeria’s governors to address allegations of mismanagement and diversion of public funds and guarantee that loans will not fund extravagant lifestyles.

The total public debt portfolio for Nigeria’s 36 states and the Federal Capital Territory is stated as N9.17 trillion by Nigeria’s Debt Management Office, while the Federal Government’s total public debt portfolio is N78.2 trillion.

SERAP further highlighted the World Bank’s current portfolio of approximately $8.5 billion in Nigeria, including approved loans for states to carry out reforms and attract investment. The organization stressed the need for the World Bank to uphold its legal obligation to ensure compliance with the Nigerian Constitution and domestic laws, including the Fiscal Responsibility Act of 2007. The letter emphasized the bank’s responsibility to facilitate justice for suspected perpetrators and the return of mismanaged or diverted public funds to state treasuries.

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