The Socio-Economic Rights and Accountability Project (SERAP) has told the World Bank to suspend applications for loans from Nigerian states.

SERAP said on Sunday that it had written to Ajay Banga, the World Bank President, to conduct independent investigations into the spending of over $8.5 billion loans and other facilities by all 36 Nigerian state governors.

READ ALSO: EXPOSED: The Man Lagos Gov’t Paid N2.3m to Supply DPO Pamphlets is a Mechanic and He Supplied Nothing

A letter, dated November 25, 2023, by SERAP deputy director Kolawole Oluwadare, told the World Bank to “suspend further applications for loans and any other funding to the 36 states until those states are able to satisfactorily explain details of spending of loans and other facilities obtained from the Bank and its partners”.

“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,” the letter read in part.

“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.”

SERAP said that the World Bank’s continuous support for these Nigerian states might create the impression of complicity in the alleged mismanagement or diversion of public funds by the states.

The organisation also told the World Bank that it would consider the option of pursuing legal action should the bank fail to implement the recommendations contained in its November 25 letter.

READ ALSO: N17m for Tinubu’s Ferry, N1.7b Vehicles for Chief of Staff… Inside Sanwo-Olu’s Questionable 2023 Contracts

“We urge the Bank to send independent monitors to the 36 states to monitor the spending of the loans and other funding obtained from the Bank and its partners to remove the risks of mismanagement or diversion of public funds by these states,” SERAP said.

“The World Bank currently has a portfolio of about $8.5 billion spread across the country. The Bank has also approved several loans and other funding facilities to the country’s 36 states, including the recent $750 million credit line meant to (allow) the states carry out reforms to attract investment and create jobs.

“The accounts of Nigeria’s 36 states are generally not open to public scrutiny as many of them continue to refuse freedom of information requests seeking transparency and accountability in the spending of public funds.

“The World Bank and its partners need to make clear to Nigeria’s state governors that it would not tolerate any mismanagement or diversion of public funds by immediately suspending any pending loans and other funding to them until the allegations of mismanagement or diversion of public funds are investigated.

“The Bank has a legal responsibility to ensure that suspected perpetrators are brought to justice, and that any mismanaged or diverted public funds are returned to the treasuries of the states.

READ ALSO: REVEALED: Sanwo-Olu Violated Procurement Law by Paying N7.475m to 4-Month-Old Business to Supply Liquid Fragrance

“The World Bank has the legal obligations to observe and promote compliance with the Nigerian Constitution 1999 [as amended] and domestic laws including the Fiscal Responsibility Act of 2007.

“Nigeria’s total public debt stock, including external and domestic debts, increased to N46.25 trillion or $103.11 billion in the fourth quarter of 2022.

“Many states reportedly owing civil servants’ salaries and pensions. Several states are borrowing to pay salaries. Millions of Nigerians resident in these states continue to be denied access to basic public goods and services such as quality education and healthcare.

“Several state governors are also reportedly spending public funds which may include funding obtained from the Bank and its partners and allocations from the Federal Government to fund unnecessary travels, buy exotic and bulletproof cars and generally fund the lavish lifestyles of politicians.

“The country’s 36 states have reportedly spent N1.71tn on recurrent expenditures, including allowances, foreign trips, office stationery, and aircraft maintenance in the first nine months of 2023.”

SERAP highlighted recent reports on state governments spending of billions on controversial expenditure.

Billions spent on feeding and welfare or refreshments and meals, entertainment at meetings, praise night and thanksgiving expenses, ‘marriage ceremony support’, rechargeable fans and lights, and unspecified welfare packages across Nigerian states have raised suspicion that public funds may have been mismanaged or diverted.

READ ALSO: REVEALED: Bayelsa Budgets N1.6bn for Food, N219m for Thanksgiving in 2023

“Section 41 of the Fiscal Responsibility Act provides: Government at all tiers shall only borrow for capital expenditure and human development,” SERAP wrote.

“The World Bank and its partners have obligations under international anticorruption and human rights law, including a responsibility to promote transparency and accountability in the management of public funds, prevent mismanagement or diversion of public funds, and redress any abuse of public trust that they may have contributed to.

“As a UN specialised agency, the World Bank also has an obligation to promote transparency and accountability in the management of public resources and effective implementation of the UN Convention Against Corruption to which Nigeria is a state party.

“The World Bank’s board of executive directors also has an obligation to ensure that the policies and decisions of the Bank are consistent with their own statutes and governments’ transparency and accountability obligations.”

A 2022 report from the World Bank claimed that at Nigeria’s current spending rate, it would take 300 years to close the country’s infrastructure gap.