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COVID-19 grant: SERAP cautions World Bank against disbursing $114.28m to Nigeria

…insists on bank’s demanding transparency, accountability from FG

 

Worried by its perceived lack of frugality and accountability in managing loans and other funds by the authorities in the country, the Socio-Economic Rights and Accountability Project (SERAP) has urged the World Bank President, Mr David Malpass, to demand transparency and accountability in the spending of the bank’s $114.28m facility for COVID-19 from the Federal Government.

 

“We urge you to use your good offices to encourage the Federal Government and 36 state governments to publicly commit to transparency and accountability in the spending of the $114.28m credit and grant for COVID-19 which the Bank’s Board of Directors recently approved for Nigeria, including by publishing details on a dedicated website.

 

“To put pressure on authorities and the 36 state governors to accept voluntary scrutiny by Nigerians and civil society regarding the spending of the funds and use of the resources, including on how they will spend the money to buy medical equipment, and improve access to clean water, sanitation and hygiene,’’ SERAP said in an open letter to the bank’s president obtained by Persecondnews.

Dated August 8, 2020, the letter was signed by SERAP Deputy Director, Mr Kolawole Oluwadare.

It stated:“The World Bank Board of Directors last Friday approved a $114.28 financing “to help Nigeria prevent, detect and respond to the threat posed by COVID-19 with a specific focus on state level responses.” According to the Bank, the $100 million credit with Project ID number: P173980, is due to be paid back over 30 years, with additional 5 years grace period.

 

“This includes $100 million credit from the International Development Association (IDA) and $14.28 million grant from the Pandemic Emergency Financing Facility.

 

“The World Bank has a responsibility to ensure that federal authorities and state governments are transparent and accountable to Nigerians in how they spend the approved credit and grant. The Bank should tread carefully in the disbursement of funds or distribution of resources to states if it is to reduce vulnerability to corruption and mismanagement.

 

“We express serious concerns that the money and resources may be stolen, diverted or mismanaged by state governors without effective transparency and accountability mechanisms, especially given increasing reports of allegations of corruption and mismanagement of COVID-19 funds by agencies of the Federal Government and state governments, and impunity of perpetrators.

 

“Insisting on transparency and accountability would ensure repayment of the credit, and protect the project objectives and intended purposes for which the funds and resources are approved, disbursed and distributed.

 

“The Bank’s power to provide credits and grants is coupled with a fiduciary responsibility to ensure that governments spending such funds meet international standards of transparency and accountability, including those entrenched in the UN Convention against Corruption to which Nigeria is a state party.”

 

The letter copied to Shubham Chaudhuri, World Bank Country Director for Nigeria, read in part: “Implementing these recommendations would prevent a repeat of alleged diversion and mismanagement of recovered Abacha loot disbursed by the Federal Government to state governments.”

 

It stressed the need for the World Bank to make it clear to the governors that it might cancel the credit and grant should they renege on their transparency and accountability commitments to spend the money and use the resources exclusively for COVID-19 related projects only and not to steal, divert or mismanage them.

 

“As the level of Federal Government monitoring of the spending of the credit and grant and use of the resources by state governors may be based on political considerations, the bank’s influence might be the only restraining force state governors will take seriously.

 

“SERAP encourages you and the World Bank in any future engagements with state governments in Nigeria to insist on accessing information on how governors are spending security votes, and the amounts of public funds states are allocating to pay former governors life pensions, among others, as well as consider the level of corruption within each state before approving any credits and grants.

 

“SERAP also encourages you and the World Bank not to sacrifice international standards of transparency and accountability in the rush to provide COVID-19 credit and grant to the 36 state governments.”

 

SERAP said it was obligatory and mandatory for the federal government to disburse the money to the 36 state governments and the FCT to break the chain of COVID-19 local transmission and limit the spread of coronavirus through containment and mitigation strategies.

 

“The approved money will also “help to finance federal procurements of medical equipment, laboratory tests, and medicines to be distributed to the states based on their needs, and to provide support to laboratories for early detection and confirmation; equipping and renovating isolation and treatment centers including community support centers; and improving in patient transfer systems through financing of ambulances and training.”

 

SERAP also urged Mr Malpass and the World Bank to disclose and widely publish the terms and conditions of the credit and grant, and the exact amount repayable by Nigeria in 30 years’ time, including the details of the interest, if any and the consequences of defaulting.

 

It wants the bank to prevail on President Muhammadu Buhari to instruct the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to jointly track and monitor spending of the credit and grant by state governments.

 

“Ask state governments to allow the media to freely report on their spending of the funds and use of the resources, and not to clampdown on journalists and the media in the exercise of their constitutional responsibilities to expose corruption and hold governments to account.

 

“Ask state governments to explicitly commit to encouraging and protecting whistle-blowers as a way of ensuring that the funds and resources are not stolen, diverted or mismanaged; clarify if, to the bank’s knowledge and information, the credit and grant have been approved by Nigeria’s National Assembly pursuant to its constitutional duties, including its oversight functions under Section 88 of the 1999 Constitution (as amended).

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