…As PDP Demands Explanations on Payments to Family Member

The Socio-Economic Rights and Accountability Project, (SERAP), has urged President Muhammadu Buhari to “provide spending details of the overdrafts and loans obtained from the Central Bank Nigeria, CBN, by the federal government since May 29, 2015. This is against the backdrop of calls by the opposition People’s Democratic Party (PDP) for explanations on the payment of N2.5 billion to a member of the President’s family

The account, according to SERAP, should include the total overdrafts, the projects on which the overdrafts have been spent; repayment of all overdrafts to date, as well as to clarify whether the $25bn (N9.7trn) overdraft reportedly obtained from the CBN is within the five-percent limit of the actual revenue of the government for 2020.

The organization is also urging the President to “provide details of spending of overdrafts and loans obtained from the CBN by successive governments between 1999 and 2015.”

In the Freedom of Information request dated 6 March, 2021 and signed by SERAP Deputy Director, Mr Kolawole Oluwadare, the organization said: “Ensuring transparency and accountability in the spending of CBN overdrafts and loans would promote prudence in debt management, reduce any risks of corruption and mismanagement, and help the government to avoid the pitfalls of excessive debt.”

SERAP said: “Disclosing details of CBN overdrafts and repayments would enable Nigerians to hold the government to account for its fiscal management and ensure that public funds are not diverted, thereby improving the ability of your government to effectively respond to the COVID-19 crisis. This means that the government would not have to choose between saving lives or making debt payments.”

According to SERAP, “The increasing level of public debt would threaten the ability of the government to invest in essential public goods and services, such as quality education, healthcare, and clean water. It is the primary responsibility of the government to ensure public access to these services in order to lift millions of Nigerians out of poverty and to achieve the Sustainable Development Goals by 2030.”

The FoI, read in part: “The growing level of public debt would increase debt-servicing costs, which would mean that your government has less resources to spend on these critical public services.”

“We would be grateful if the requested information is provided to us within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then, the Incorporated Trustees of SERAP shall take all appropriate legal actions to compel your government to comply with our request.”

“SERAP is concerned about the growing level of debts by the Federal Government, and the apparent lack of transparency and accountability in the spending of overdrafts and loans so far obtained from the CBN, as well as the repayments to date.”

“Also, the recent overdraft of $25.6bn (about N9.7trn) obtained from the CBN would appear to be above the five-percent limit of the actual revenue of the Federal Government for 2020, that is, N3.9trn, prescribed by Section 38(2) of the CBN Act 2007. SERAP notes that five-percent of N3.9trn is N197bn.”

“While section 38(1) of the CBN Act allows the Bank to grant overdrafts to the Federal Government to address any temporary deficiency of budget revenue, sub-section 2 provides that any outstanding overdraft ‘shall not exceed five-percent of the previous year’s actual revenue of the Federal Government.’ Similarly, Section 38(3) requires all overdrafts to ‘be repaid as soon as possible and by the end of the financial year in which the overdrafts are granted.’”

“The CBN is prohibited from granting any further overdrafts until all outstanding overdrafts have been fully repaid. Under the CBN Act, ‘no repayment shall take the form of a promising note or such other promise to pay at a future date, treasury bills, bonds or other forms of security which is required to be underwritten by the Bank.’”

“Similarly, the Fiscal Responsibility Act provides in section 41 that government ‘shall only borrow for capital expenditure and human development.’ Under the Act, the government ‘shall ensure that the level of public debt as a proportion of national income is held at a sustainable level.’”

“Section 44 of the Act requires the government to specify the purpose of any borrowing, which must be applied towards capital expenditures, and to carry out cost-benefit analysis, including the economic and social benefits of any borrowing. Any borrowing should serve the public good, and be guided by human rights principles.”

“By the combined reading of the provisions of the Constitution of Nigeria 1999 (as amended), the Freedom of Information Act, UN Convention against Corruption, the International Covenant on Economic, Social and Cultural Rights, and the African Charter on Human and Peoples’ Rights, there are transparency obligations imposed on your government to disclose information to the public concerning spending of CBN overdrafts, loans and repayments to date.”

“The Nigerian Constitution, Freedom of Information Act, and these treaties rest on the principle that citizens should have access to information regarding their government’s activities.”

“SERAP has consistently recommended to the Federal Government to reduce its level of borrowing and to look at other options of how to finance its budget, such as reducing the costs of governance, and addressing systemic and widespread corruption in ministries, departments and agencies (MDAs) that have been documented by the Office of the Auditor-General of the Federation.”

“Our requests are brought in the public interest, and in keeping with the requirements of the Nigerian Constitution; the Freedom of Information Act; the Fiscal Responsibility Act; the Central Bank Act; the Debt Management Office Act; and the country’s international obligations including under the UN Convention against Corruption; the International Covenant on Economic, Social and Cultural Rights, and the African Charter on Human and Peoples’ Rights. Nigeria has ratified these treaties.”

“According to our information, your government has reportedly recently obtained $25 billion from the CBN as overdrafts. The Federal Government has also reportedly decided to convert the overdrafts to long-term debt. This latest borrowing from the CBN is in addition to reported over $20 billion external debt, and N7 trillion domestic debt.”

The letter is copied to Mr Abukabar Malami, SAN, Attorney General of the Federation and Minister of Justice; Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning; Godwin Emefiele, the Governor of CBN; and Ms Patience Oniha, Director-General of the Debt Management Office.

President Buhari has also been tasked to speak out on the alleged N2.5 billion transferred to family members.

The Peoples Democratic Party (PDP), which stated this at the weekend, said that the recent reports of massive treasury looting allegedly involving persons close to President Buhari, has further exposed his administration as “a putrid citadel of corruption.”

The PDP asked the Buhari Presidency not to keep quiet but offer explanation to allegations in the media space that certain officials and individuals close to the Presidency defrauded the nation of the sum of N51 billion out of which N2.5 billion was wired to a member of Mr. President’s immediate family.

In a statement by its spokesman, Mr Kola Ologbondiyan, challenged the Buhari Presidency to speak out on allegations, also in the public space, that 122 posh properties, valued at over N1.6 trillion and seized by the Economic and Financial Crimes Commission (EFCC), were shared and allocated to cronies on the directives of the Presidency.

“The Buhari Presidency should not pretend not to be aware that the media is awash with reports that a known confidant of Mr. President and certain officials of the Nigerian Customs defrauded our nation to the tune of N51 billion under a hazy ‘Revenue Assurance Fund’, out of which N2.5 billion was reported to have been transferred to a foundation allegedly owned by a female member of the President’s immediate family.

“This close confidant, who is alleged to be fronting for certain individuals close to the President in scandalous contracts running into billions of naira in the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC) among other government agencies, was arrested at Heathrow Airport in the United Kingdom in 2019, for alleged passport scam and laundering of 200,000 pounds allegedly belonging to a particularly relation of Mr. President.”

“On the EFCC scandal, the Buhari Presidency should come clean on how the anti-graft agency was hijacked to become an instrument of treasury looting and corrupt enrichment for fraudulent friends and officials of the Buhari administration.”

“It is indeed appalling that such impunity and barefaced looting are going on under an administration that came into governance with an assurance of fighting corruption, only to end up swimming in an ocean of corruption,” the party said.

The PDP asked the Buhari Presidency to end its silence as the issues are already in the public domain, with Nigerians demanding for investigations.

The PDP therefore demanded that the Buhari Presidency should order an immediate and open investigation into the allegations into these duplicitous enterprises for which persons connected to the Presidency have again been mentioned.