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 of Nigeria (CBN) by the federal government since May 2015.
SERAP said the details should include the total overdrafts, the projects on which the overdrafts have been spent, repayment of all overdrafts to date, as well as clarity on 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 organisation is also urging Mr Buhari to “provide details of spending of overdrafts and loans obtained from the CBN by successive governments between 1999 and 2015.”
In a Freedom of Information request dated March 6, 2021, and signed by SERAP’s deputy director, Kolawole Oluwadare, the organisation 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.”
“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.”
A PREMIUM TIMES’ report recently detailed the fiscal concerns around the apex bank’s funding of the Nigerian government’s deficits in recent years.
The report highlighted how the Nigerian government’s repeated decision to turn to the Central Bank of Nigeria (CBN) for deficit financing of its budgets raises questions about the state of public finance management and fiscal stability in Africa’s largest economy.
Although the CBN empowers the bank to grant “temporary advances to the Federal Government in respect of temporary deficiency of budget revenue”, it stipulates that the amount of such advances outstanding “shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government”.