SERAP, a civil society organisation that promotes transparency and accountability in Nigeria, has called on President Bola Tinubu to direct the Attorney General of the Federation and Minister of Justice, Mr Lateef Fagbemi, SAN, and relevant anti-corruption agencies to promptly investigate the allegations that a $3.4 billion loan obtained from the International Monetary Fund (IMF) is missing, diverted or unaccounted for.
The loan was obtained in April 2020 to finance the budget and manage the health crisis caused by the COVID-19 pandemic, but the Auditor-General of the Federation, Mr Anthony Ayine, disclosed in his 2020 annual report that there was no evidence of how the loan was spent or where it went.
In a letter dated 3 February 2024 and signed by SERAP deputy director, Kolawole Oluwadare, the organisation said that the public has a legitimate interest in ensuring justice and accountability for these serious allegations. It warned that if the president fails to act within 7 days, SERAP will take legal action to compel him to do so.
SERAP argued that Nigerians are suffering from a double injustice: they are not benefiting from the projects that the loan was supposed to fund, and they are still paying back the loan with interest.
SERAP also said that the alleged corruption in the use of the IMF loan violates the Nigerian Constitution, the anti-corruption laws and the international obligations of the country, including the UN Convention against Corruption.
The Auditor-General recommended that the missing money should be recovered and returned to the public treasury, and that the suspects should be punished and referred to the anti-corruption agencies for further action.
The Auditor-General also asked for the proof of the recovery to be sent to the Public Accounts Committee of the National Assembly.
According to reports, Nigeria will repay the IMF loan in five instalments from 2023 to 2027. The first instalment will be $497.17 million, the second will be $1.76 billion, the third will be $865.27 million, and the last two will be $33.99 million each. These are only interest payments.
SERAP urged the president to ensure that the allegations are investigated and the culprits are prosecuted, in order to serve the public interest and end the impunity of corruption.
The letter, which was copied to Mr Fagbemi, the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr Abdulrasheed Bawa, and the Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Mr Bolaji Owasanoye, read in part:
“Impunity for corruption in the management of loans obtained by Nigeria will continue as long as high-ranking public officials go largely unpunished for their alleged crimes. It is by pursuing these allegations and taking the evidence before the court that the truth will be revealed and justice best served.”
“SERAP notes that the consequences of corruption are felt by citizens on a daily basis. Corruption exposes them to additional costs to pay for health, education and administrative services.”
“SERAP notes that your government has a sacred duty to ensure that the country’s loans including those obtained from the IMF are transparently and accountably used solely for the purposes for which the loans are obtained, and for the effective development of public goods and services as well as the general public interests.”
“This implies providing strong leadership in the efforts to curb public sector corruption, and to refer to appropriate anti-corruption agencies any allegations of corruption in which any officials and agencies of government may be involved or complicit.”
“Section 13 of the Nigerian Constitution 1999 [as amended] imposes clear responsibility on your government to conform to, observe and apply the provisions of Chapter 2 of the constitution. Section 15(5) imposes the responsibility on your government to ‘abolish all corrupt practices and abuse of power’ in the country.”
“Under Section 16(1) of the Constitution, your government has a responsibility to ‘secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity.’”
“Section 16(2) further provides that, ‘the material resources of the nation are harnessed and distributed as best as possible to serve the common good.’”
“Similarly, articles 5 and 9 of the UN Convention against Corruption also impose legal obligations on your government to ensure proper management of public affairs and public funds including loans obtained by the country, and to promote sound and transparent administration of public affairs.”
“The UN Convention against Corruption and the African Union Convention on Preventing and Combating Corruption to which Nigeria is a state party obligate your government to effectively prevent and investigate allegations of corruption and mismanagement of public funds including loans obtained by the country.”
“Specifically, article 26 of the UN convention requires your government to ensure ‘effective, proportionate and dissuasive sanctions’ including criminal and non-criminal sanctions, in cases of grand corruption.”
“Article 26 complements the more general requirement of article 30, paragraph 1, that sanctions must take into account the gravity of the corruption allegations.”
- The IMF loan was approved by the IMF Executive Board on 28 April 2020 under the Rapid Financing Instrument (RFI) to support Nigeria’s efforts to address the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.
According to the IMF, the RFI loan was intended to “help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices”.
The IMF also stated that the RFI loan was subject to the IMF’s policies on emergency assistance, which require that the borrowed funds be used for the purposes specified in the request and that adequate safeguards are in place to ensure that the funds are used for those purposes.
However, the 2020 annual audited report by the Auditor-General of the Federation published last week, revealed that there was no document to show the movement and spending of the IMF loan.
The report stated that “the sum of $3,400,000,000.00 (Three Billion, Four Hundred Million US Dollars) was received from International Monetary Fund (IMF) on 28/04/2020 vide CBN Statement of Account but was not disclosed in the Cashbook nor in the Consolidated Statement of Financial Performance. No document was made available to ascertain the utilisation of the fund”.