Protest at IMF, World Bank meeting over Nigeria’s borrowing

NaijaNews reports that as the 2023 edition of the World Bank Group, WBG, spring meetings draw to a close tomorrow in Washington, DC, United States of America, Nigeria’s participation for the first time ever appears to have been colored by policy protests coming from the civil society groups.

On the sidelines of the meetings, Auwal Rafsanjani, the Executive Director of the Civil Society Legislative Advocacy Center (CSLAC, one of the groups from Africa at the meeting, told a select group of journalists that the representatives of civil society groups in Africa had a unique session with the Bretton Woods Institutions where the issues of accountability and governance in respect of debt were discussed.

According to him, they raised a concern with the World Bank and the International Monetary Fund, IMF, about Nigeria’s incessant borrowings from the two institutions, especially the latest borrowing of $800 million.

He also said that the backdrop to the concern was the worsening economic situation of the country amid continued borrowing, which he said was plunging the country deeper into debt crises that would be faced by generations of citizens that did not benefit from the loans.

He alleged that the funds borrowed were not used for the purpose but rather were taken up by corruption.

His words: ‘‘The Nigerian economy is really suffering from so many problems: corruption, mismanagement, misplacement of priorities, lack of compliance with our financial regulations, and even what we may see as deliberate efforts by public officials to undermine the revenue by creating leakages that further put the economy in jeopardy.

‘‘Nigeria continues to repay this money (loans) despite the deficit in our infrastructure and other social sectors that suffer significantly, like the collapse of education and the healthcare system, and other important aspects of governance like security.

‘‘Yet the Nigerian government is borrowing money to finance subsidies. ” Closely related to this development is the government’s recent pronouncement to borrow and spend over $800 million in the name of subsidy palliative.

‘‘This is another scam, because in 2020, during COVID, the Nigerian government approached the IMF for a loan of $3.4 billion with a view to cushion the effects of COVID. But what we have seen is that the money was not judiciously utilized, and ordinary Nigerians who were promised palliatives did not see any. ” In fact, because of official corruption, money was diverted by different agencies and parastatals in the name of palliative care.

‘‘We all remember how NNPC came to the National Assembly to testify about the billions they used in the name of COVID palliatives. We also remembered the Humanitarian Affairs Ministry and how they told the whole nation that, while children were at home, they were doing school feeding programs.

‘‘So this is how the money borrowed by the Nigerian government and the contributions and donations by international partners and even Nigerian philanthropists disappeared without accountability.

‘‘So for you to now, at the last minute of your regime, be leaving next month and borrowing $800 million to share without any clear accountability framework, it calls for alarm, worry, and concern.

‘‘With the rising inflation, increase in unemployment, and increase in poverty, the country’s economy is becoming more and more worrisome. ” This is why the Civil Society Legislative Advocacy Center came along with other civil society organizations to the spring meeting taking place here in Washington, DC, to have discussions with World Bank and IMF officials.

‘‘So yesterday we met with the directors of the IMF and World Bank, with a few select civil society groups from Africa, of which I happen to be one, to discuss our concern about the way and manner in which our country quickly ran to come and borrow money, even in deviation from the fiscal responsibility law, which clearly states how government should borrow money.

‘‘But they borrow this money to finance non-economic projects. In many instances, the so-called constituency projects also take up a large chunk of the money they are borrowing to finance the budget.

‘‘So, we have come to discuss with them to express our worries and concern that the non-transparent spending of borrowed money by our government is of great concern to us and that they must not continue to give these monies without putting in place an accountability mechanism and also safe reporting for whistle-blowers.

“And if these monies are meant for the people of Nigeria, then they must involve non-state actors at least to observe and monitor how these monies are spent.”

‘‘Now, the Nigerian government continues to borrow money from all sorts of commercial banks. The worst part of it is that we are borrowing at the highest interest rate, which is difficult to repay.

‘‘Even the conventional ones that they earlier wanted, we are finding it difficult to repay, not to mention those other commercial banks whose charges are very high and whose interest rates are very high.

By Emeka Anaeto, Business Editor in Washington, DC

As the 2023 edition of the World Bank Group, WBG, spring meetings draw to a close tomorrow in Washington, DC, United States of America, Nigeria’s participation for the first time ever appears to have been colored by policy protests coming from the civil society groups.

On the sidelines of the meetings, Auwal Rafsanjani, the Executive Director of the Civil Society Legislative Advocacy Center (CSLAC, one of the groups from Africa at the meeting, told a select group of journalists that the representatives of civil society groups in Africa had a unique session with the Bretton Woods Institutions where the issues of accountability and governance in respect of debt were discussed.

According to him, they raised a concern with the World Bank and the International Monetary Fund, IMF, about Nigeria’s incessant borrowings from the two institutions, especially the latest borrowing of $800 million.

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He also said that the backdrop to the concern was the  worsening economic situation of the country amid continued borrowing, which he said was plunging the country deeper into debt crises that would be faced by generations of citizens that did not benefit from the loans.

He alleged that the funds borrowed were not used for the purpose but rather were taken up by corruption.

His words: ‘‘The Nigerian economy is really suffering from so many problems: corruption, mismanagement, misplacement of priorities, lack of compliance with our financial regulations, and even what we may see as deliberate efforts by public officials to undermine the revenue by creating leakages that further put the economy in jeopardy.

‘‘Nigeria continues to repay this money (loans) despite the deficit in our infrastructure and other social sectors that suffer significantly, like the collapse of education and the healthcare system, and other important aspects of governance like security.

‘‘Yet the Nigerian government is borrowing money to finance subsidies. ” Closely related to this development is the government’s recent pronouncement to borrow and spend over $800 million in the name of subsidy palliative.

‘‘This is another scam, because in 2020, during COVID, the Nigerian government approached the IMF for a loan of $3.4 billion with a view to cushion the effects of COVID. But what we have seen is that the money was not judiciously utilized, and ordinary Nigerians who were promised palliatives did not see any. ” In fact, because of official corruption, money was diverted by different agencies and parastatals in the name of palliative care.

‘‘We all remember how NNPC came to the National Assembly to testify about the billions they used in the name of COVID palliatives. We also remembered the Humanitarian Affairs Ministry and how they told the whole nation that, while children were at home, they were doing school feeding programs.

‘‘So this is how the money borrowed by the Nigerian government and the contributions and donations by international partners and even Nigerian philanthropists disappeared without accountability.

‘‘So for you to now, at the last minute of your regime, be leaving next month and borrowing $800 million to share without any clear accountability framework, it calls for alarm, worry, and concern.

‘‘With the rising inflation, increase in unemployment, and increase in poverty, the country’s economy is becoming more and more worrisome. ” This is why the Civil Society Legislative Advocacy Center came along with other civil society organizations to the spring meeting taking place here in Washington, DC, to have discussions with World Bank and IMF officials.

‘‘So yesterday we met with the directors of the IMF and World Bank, with a few select civil society groups from Africa, of which I happen to be one, to discuss our concern about the way and manner in which our country quickly ran to come and borrow money, even in deviation from the fiscal responsibility law, which clearly states how government should borrow money.

‘‘But they borrow this money to finance non-economic projects. In many instances, the so-called constituency projects also take up a large chunk of the money they are borrowing to finance the budget.

‘‘So, we have come to discuss with them to express our worries and concern that the non-transparent spending of borrowed money by our government is of great concern to us and that they must not continue to give these monies without putting in place an accountability mechanism and also safe reporting for whistle-blowers.

“And if these monies are meant for the people of Nigeria, then they must involve non-state actors at least to observe and monitor how these monies are spent.”

‘‘Now, the Nigerian government continues to borrow money from all sorts of commercial banks. The worst part of it is that we are borrowing at the highest interest rate, which is difficult to repay.

‘‘Even the conventional ones that they earlier wanted, we are finding it difficult to repay, not to mention those other commercial banks whose charges are very high and whose interest rates are very high.

‘‘We are also concerned that there is no civic space to discuss the economic management of Nigeria with non-state actors in Nigeria. For example, the minister of finance is here, the CBN governor is here, and so many government agencies are here, but they are not able to have this kind of discussion with non-state actors that are also attending this meeting, unlike what we see in other countries.

‘‘For other countries, they sit down with their non-state actors, like civil society organizations, to discuss how to even approach the IMF and the World Bank.

‘‘But the arrogance of a few tiny public officials in Nigeria is closing the space for the civil society to make valuable contributions to address the economic deterioration in Nigeria.

‘‘So that is why, since we have a voice here, we have the opportunity to interact with them (the World Bank and IMF). They are the ones who are giving this loan, and they are the ones who are also talking to the Nigerian government.

‘‘We are talking through them sadly, which is not supposed to be the case. We are supposed to be taking them to our government, but our government has decided to close the civic space to enable civil society to give concrete recommendations and suggestions on how to rebrand the economy.

‘‘So we also want the administration of Bola Tinubu to ensure that they strengthen our fiscal responsibility law so that whenever we are borrowing, we are in compliance with the fiscal responsibility law. And those loans must not be just for consumption; they must actually be for productivity that will even pay back those loans’’.