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Fresh $800m loan: Why Nigeria needs lame duck legislation

With just about two weeks left to the end of his second and final term in office, President Muhammadu Buhari last Wednesday sent a letter…

With just about two weeks left to the end of his second and final term in office, President Muhammadu Buhari last Wednesday sent a letter to the Senate requesting approval for a fresh or “additional” $800 million facility from the World Bank. Were Nigerians not already too numbed to be scandalized, such a request should cause outrage among the citizenry. But more importantly, the report highlights, once again, why Nigeria needs legislation that will bar the federal and state executives from taking certain kinds of decisions, once a new president or governor has been elected.

President Buhari’s letter seeking approval for the loan raises so many difficult questions for the government at this point that is worth quoting at length. As he told the Senate: “Please note that the Federal Executive Council approved an additional loan facility to the tune of USD800 million to be secured from the World Bank, for the National Social Safety Net Programme and the need to request for your consideration and approval to ensure early implementation.

“The Senate may wish to note that the programme is intended to expand coverage of shock responsive safety net support among the poor and vulnerable Nigerians. This will assist them in coping with the costs of meeting basic needs. You may wish to note that, the Federal Government of Nigeria under the conditional cash transfer window of the programme will transfer the sum of N5,000 per month to 10.2 million poor and low-income households for a period of six months, with a multiplier effect on about 60 million individuals. In order to guarantee the credibility of the process, digital transfers will be made directly to beneficiaries’ accounts and mobile wallets.

“Given the above”, the letter added, “I wish to invite the Senate to kindly approve an additional loan facility to the tune of USD800 million to be secured from the World Bank for the National Social Safety Net Programme”. The President then concluded by expressing hope that his request will “receive expeditious consideration by the Senate.”

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We are deeply concerned not just by the letter and its contents, but also by the lack of sufficient seriousness and accountability in the government that the whole episode implies. First, why would a government elected on a mandate of change eight years ago wait until its very last few days in office to do anything to help 60 million Nigerians get out of poverty? If the government genuinely meant to help stimulate economic growth in the informal sector, and improve nutrition, health, and education to help “10.2 million poor and low-income households”, that should have been the very first item on the government’s agenda from its first day in office.

By now, talk would be about the number of Nigerians pulled out of poverty by this government since then, not the tens of millions still in it. We believe it is a scandal, that the government knows there are up to 60 million “poor and low income Nigerians” who need help with feeding, health and livelihoods but did not do enough to help them over the past eight or four years.

But we are equally scandalized by the apparent lack of accountability and transparency to the process. First, we are compelled to ask why expeditious approval when the government’s entire authority expires completely in less than two weeks? Second, this government last mentioned safety net for the poor in Nigeria only in the context of the $800 million loan it said, in April, that it had secured from the World Bank to help cushion the effects a then proposed withdrawal from fuel subsidy, a policy that had since been dropped by the government itself. So, where is the $800m first received? Has the government returned it to the World Bank or has it been disbursed to the projected 10m poor households even though the policy has been suspended? And how is this request related to the previous $800m that was in the news last month?

These are all important questions of accountability and transparency, both specifically for this policy, and more broadly for this outgoing government as a whole. We, therefore, urge the Senate to not only withhold approval for this loan, but to request additional information in the public interest. Similarly, we urge the in-coming administration to issue caveat emptor on the loan, should the Senate rubber stamp it. No administration has the right to take such a massive decision on behalf of Nigerians yet unborn with less than one month to go.

Finally, we call for a legislation that will prevent governors and presidents from taking out loans, awarding contracts, or making payments to officials beyond certain thresholds once the next governor or president has been elected. Such law would make outgoing administrations more accountable to the people, and prevent the reckless and potentially self-serving spending spree embarked upon by governors and presidents few months to the end of their administrations. A bill for such a law is what President Buhari should have sent to the Senate last week, not yet another unexplained request for billions in foreign loans.

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