Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Nigerian Government, asking the court to compel President Muhammadu Buhari to disclose details of the overdrafts and loans obtained from the Central Bank of Nigeria (CBN) since May 29, 2015.
The Non-Governmental Organisation is also requesting for details of the projects on which the overdrafts have been spent, and repayments of all overdrafts to date.
Joined in the lawsuit as respondents are the Attorney General of the Federation and Minister of Justice, Abubakar Malami; the Minister of Finance, Budget and National Planning, Zainab Ahmed; and the Governor of CBN, Godwin Emefiele.
SERAP is also seeking an order to compel the president to explain and clarify whether the $25bn (N9.7trillion) overdraft reportedly obtained from the CBN is within the five-percent limit of the actual revenue of the government for 2020.
The suit followed SERAP’s Freedom of Information (FoI) request to President Buhari, stating that: “Disclosing details of overdrafts and repayments would enable Nigerians to hold the government to account for its fiscal management and ensure that public funds are not mismanaged or diverted.”
In the suit number FHC/ABJ/CS/559/2021 filed last week at the Federal High Court, Abuja, SERAP is also seeking: “an order directing and compelling President Buhari to disclose details of overdrafts taken from the CBN by successive governments between 1999 and 2015.”
In the suit, SERAP said, “Secrecy and the lack of public scrutiny of the details of CBN overdrafts and repayments is antithetical to the public interest, the common good, the country’s international legal obligations, and a fundamental breach of constitutional oath of office.”
It added, “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.”
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“By the combined reading of the Constitution of Nigeria 1999 (as amended), the Freedom of Information Act, the UN Convention against Corruption, and the African Charter on Human and Peoples’ Rights, there are transparency obligations imposed on the government to disclose information to the public concerning details of CBN overdrafts, loans and repayments to date.”
The suit filed on behalf of SERAP by its lawyers Kolawole Oluwadare and Ms Adelanke Aremo, read in part, “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.”
“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.’”
According to SERAP,. the CBN Act has stipulated that the apex bank cannot grant any further overdrafts until all outstanding overdrafts have been fully repaid.
It added that “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 the 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 Fiscal Responsibility 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.”
However, no date has been fixed for the hearing of the suit.
