" ITREALMS: Loan trap: World Bank accused of setting Nigeria up with $800m funding - ITREALMS

Friday, May 19, 2023

Loan trap: World Bank accused of setting Nigeria up with $800m funding - ITREALMS

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The World Bank Country office in Nigeria has been accused of engaging on practices considered illegal under Nigeria’s legal regime, in relation to borrowing and loan indebtedness worth $800m, about ₦368,615,712,800.00, reports 
Loan trap: World Bank accused of setting Nigeria up with $800m funding - ITREALMS
Leading in the accusation, the Human and Environmental Development Agenda (HEDA Resource Center) said the Bank in its engagement with some Civil Society Organizations regarding the planned $800 million loan to the Nigerian Government though is subject to the approval of the National Assembly of Nigeria before its disbursement will take effect.

HEDA argued that the loan represents an indebtedness trap agenda for Nigeria and condemns the World Bank's approach to addressing poverty alleviation.

A press statement released by HEDA’s Chairman, Olanrewaju Suraju, the organization expressed concerns over the loan's intentions. Stressing "This goes to confirm the loan and indebtedness was all along World Bank idea and agenda and not that of a government that is with less than a month in office. As CSOs, we have no other duty than to condemn the loan, World Bank and the FG on this corruption perfection strategy of loan and poverty elongation tagged alleviation."

According to HEDA, the Financial Responsibility Acts, 2007 prohibits any Government agent or institution from borrowing for recurrent expenditure and this fact is known to the World bank, as a global financial institution. Financial Responsibility Act 2007, Section 44 (1)(a) States that, “Government at al tiers shall only borrow for capital expenditure and human development, provided that, such borrowing shall be on concessional terms with low interest rate and with a reasonable long amortization period subject to the approval of the appropriate legislative body where the necessary;”. Section 44 (3) further states that, “Non-compliance with the provisions of this section shall make the action taken an offence.”

HEDA further emphasized that the World Bank should focus on assisting Nigeria in becoming self-sufficient in fuel production instead of perpetuating importation dependency.

Suraju criticized the loan, stating, "The World Bank is supposed to get Nigeria out of fuel importation by assisting the country to make refineries work or build new refineries and get us out of importation of fuel. World Bank is only encouraging us to remain importation dependent and provide a market for countries selling refined petroleum to us. This loan is a trap and nothing more."

The Civil Society Organization’s criticism raises concerns about the loan's potential impact on Nigeria's long-term economic stability and self-reliance. The organization urges the World Bank to reconsider its approach and prioritize investments that promote self-sufficiency, such as revitalizing domestic refineries or constructing new ones, rather than perpetuating importation reliance.

As Nigeria grapples with socio-economic challenges, HEDA’s call to focus on sustainable solutions reflects a broader concern among civil society organizations regarding the loan's effectiveness in achieving long-term development goals.

The National Assembly is therefore called upon to reject the presidential request for an approval to obtain the loan as any approval will constitute a violation of the law properly enacted by the Assembly and accessory to the offence about to the committed by all those involved in the loan concoction and administration.

HEDA threatens to work collaboratively with other stakeholders to develop strategy to evoke provisions of the law for the prosecution of all those associated with the violation of the FRA 2007 and other associated offences, and promote genuine economic independence and prosperity for the Nigerian people.

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