Article summary

  • Socio-Economic Rights and Accountability Project (SERAP) criticizes Nigerian government’s justification for seeking an $800 million loan for cash transfers after fuel subsidy removal.
  • SERAP appeals to the World Bank to halt the loan issuance and reopen discussions with the incoming administration to clarify the loan’s purpose and use.
  • Transparency and accountability concerns raised by SERAP regarding the loan request, urging the World Bank to address these issues and consider alternatives proposed by stakeholders, such as investing in local refineries and the National Gas Expansion Program.

Socio-Economic Rights and Accountability Project (SERAP) has said that the Buhari administration has no justification for seeking the $800 million loan it had planned for cash transfers following the removal of fuel subsidy removal.

SERAP made an appeal to the World Bank last week to put a stop to the issuance and reopen discussions with the incoming administration on the reasons and use of the $800 million loan.

Recall that Nairametrics had reported that President Buhari had written a letter to the Nigerian Senate seeking its approval for the $800 million World Bank loan which is meant to help cushion the effect of petrol subsidy removal on poor and vulnerable Nigerians. A part of President Buhari’s letter read:

  • “I wish to invite the Senate to kindly approve an additional loan facility to the tune of $8OO million to be secured from the World Bank for the National Social Safety Net Programme, expressing hope that the request will receive expeditious consideration by the Senate.”

Buhari’s administration has less than 2 weeks to leave office

In its letter to the World Bank, SERAP had written:

  • “SERAP is concerned that the government is seeking to spend the loan when it has barely two weeks to leave office and when the project objectives and intended purposes for which the loan is reportedly approved and will be disbursed remain unclear.
  • “The government has not satisfactorily explained or justified the need for the loan at this time, especially given the lack of clarity on its use and the crippling debt burden, and the disproportionately negative impact of these retrogressive measures on poor Nigerians.”

What World Bank must consider

Also, SERAP raised transparency issues with the request and asked the World Bank to consider the transparency and accountability issues regarding the loan request. The letter also read:

  • “The World Bank cannot close its eyes to these important transparency, accountability and human rights issues. The National Economic Council (NEC) on April 27 reportedly suspended the planned removal of subsidy on petroleum products by the end of the Buhari administration.
  • “We would consider the option of pursuing legal action should the World Bank refuse to suspend the disbursement of the loan to the Federal Government and to implement the other recommendations contained in this letter, and we may join the government in any such suit.”

What you should know

Some stakeholders have provided alternatives to the $800 million disbursement to poor Nigerians following the fuel subsidy removal. Some of these include loan for the speedy repair of local refineries, the implementation of the National Gas Expansion Program (NGEP), which will see a mass conversion of Nigerian vehicles to run on natural gas as opposed to fuel.

The Independent Marketers Association of Nigeria (IPMAN) has already offered to place natural gas dispensers in 30,000 fuel stations across the country under the program. However, there has been no response from the federal government.