SERAP sues Buhari over ‘secrecy in spending of loans, debt crisis’

SERAP sues Buhari over ‘secrecy in spending of loans, debt crisis’

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit in the ECOWAS court against the Buhari administration, alleging “secrecy in loan spending, unsustainable levels of borrowing by the government and 36 states, debt crisis, and disproportionately negative impact of these retrogressive measures on poor Nigerians.”

In the s/n ECW/CCJ/APP/05/22 filed last week, SERAP is seeking among others: “An order to direct and compel the Federal Government to issue an immediate moratorium on borrowing by itself, and the 36 states, in conformity with the country’s international human rights obligations.”

“An order directing and obliging the Federal Government to publish information of the spending of the loans acquired by governments since 1999, including the list of projects and locations of any such projects on which these loans have been spent,” according to SERAP.

In the the suit filed by SERAP and behalf of concerned Nigerians, the organisation contends that, “Persistent and unsustainable borrowing by the federal and state governments and the crippling debt burden undermine the rights of Nigerians to economic and social development, and are antithetical to the public interest.”

“The crippling debt burden is a human rights issue within the jurisdiction of the ECOWAS Court,” SERAP claims, “because when the entire country is burdened by unsustainable debts, there will be little money left to ensure access to legally enforceable socio-economic rights for poor and vulnerable Nigerians.”

“There is a lack of openness and accountability in the spending of the loans thus far received, as well as opacity around the terms and circumstances in loan agreements, including payback details for these loans,” according to SERAP. The specifics of the projects for which the loans are used are kept under wraps.”

SERAP is also seeking “an order directing and compelling the Federal Government to conduct assessment of the borrowing by governments since 1999 to address the dire consequences of unsustainable debts on people and communities and to ensure that borrowing at all levels of government considers the human rights impacts.”

“Long-term unsustainable debt can be a barrier to the government’s ability to mobilize resources for human rights, and may lead to taxes and user fees that negatively harm disadvantaged and marginalized Nigerians,” according to the action filed by SERAP lawyers Kolawole Oluwadare and Opeyemi Owolabi.

The suit, read in part: “If not addressed, the escalating borrowing and looming debt crisis would cripple the ability of both the Federal Government and the 36 states to deliver ensure basic socio-economic rights, such as quality healthcare, education, and clean water of the most vulnerable and marginalized sectors of the population.”

“Without a moratorium on borrowing, the Federal Government and many of the 36 states may be caught in a process driven mostly by creditors’ needs. This will result in an exorbitant social cost for the marginalized and vulnerable sectors of the population.”

“The ability of the Nigerian government to ensure human rights is inextricably related to the ability to spend needed resources. Growing debt burdens and debt repayment difficulties will have negative impacts on the ability of the Defendant to fulfill the basic socio-economic rights of poor and vulnerable Nigerians.”

“Sustainable debt management by the Federal Government and state governments will contribute to mobilizing resources for human rights and essential public services, and promote a culture of responsible borrowing.”

“The Federal Government and many of the 36 states would seem to be in debt distress or at high risk of debt distress. According to reports, the Senate and House of Representatives recently approved the loans of $5,803,364,553.50 and a grant component of $10m under the 2018-2020 External Borrowing (Rolling) Plan of the Federal Government.”

“This followed previous approvals by the National Assembly of $16.2 (16,230,077,718) billion loan; €1 (1,020,000,000) million and a grant component of $125 million loan; $36.8 billion, €910 million loans, and a grant component of $10 million; $8.3 billion and €490 million loans; $6.1 billion, $1.5 billion and 995 million loans; and $4(4,054,476,863), €710 million and grant component of $125 million.”

“Several of the 36 states are also facing a debt crisis, and vicious debt cycles. According to the Debt Management Office, the foreign debt stock of the Federal Government, 36 state governments and the Federal Capital Territory presently stands at $37.9bn.”

“The loans from China alone amount to $3.59bn. According to the UN Independent Expert on foreign debt and human rights, Nigeria faces debt service relative to tax revenues that exceed 20 per cent, with escalating social tensions linked to poverty and inequality.”

“According to the World Bank’s IDA FY21 Report, with debt exposure of $11.7 Billion US Dollars, Nigeria ranked fifth among the top 10 countries with highest debt risk exposure. The top four countries are India with $22 billion, Bangladesh ($18.1 Billion), Pakistan ($16.4 Billion), and Vietnam ($14.1 Billion).”

“While it is critical for the Federal Government and state governments to have adequate resources to fund their budgets, it is equally critical for governments to give consideration to the human rights impact of borrowing. Persistent borrowing is inconsistent with the country’s human rights obligations.”

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