SERAP sues FG over ‘$25bn overdraft taken from CBN’

The Socio-Economic Rights and Accountability Project (SERAP) says it has filed a lawsuit, asking the court “to compel the federal government to disclose details of a $25 billion (N9.7trn) overdraft reportedly obtained from the Central Bank of Nigeria (CBN).

In a statement on Sunday, Kolawole Oluwadare, SERAP’s deputy director, said the group also asked the court to ask the government to disclose spending details of the overdrafts and loans obtained from the apex bank since May 29, 2015.

Oluwadare said the suit followed SERAP’s freedom of information (FoI) request to President Buhari to disclose the overdraft and repayment plan details.

He added that 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.

“Transparency and accountability in the spending of CBN overdrafts would also ensure that public funds are properly spent, reduce the level of public debt, and improve the ability of the government to invest in essential public goods and services, such as quality education, healthcare, and clean water,” SERAP said in a statement.

“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.

“Transparency and accountability in the spending of CBN overdrafts and loans would also improve the ability of the 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.

“The recent overdraft of $25.6bn (about N9.7trn) reportedly 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.’”

SERAP said Abubakar Malami, the attorney general of the federation and minister of justice, Zainab Ahmed, minister of finance, budget and national planning, and Godwin Emefiele, CBN governor, are joined in the suit.

The anti-corruption group said the court actions are brought in the public interest and in line with 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 legal obligations.

No date has been fixed for the hearing of the suit.