Socio-Economic Rights and Accountability Project has urged
the President, Muhammadu Buhari, to “issue an immediate moratorium on borrowing
by the Federal Government and the 36 states to address a systemic debt crisis,
prevent retrogressive economic measures, and the disproportionately negative
impact of unsustainable debt on the poor Nigerians.”
The request followed the recent approval by the National
Assembly of President Buhari’s request for a $5.8bn loan and grant of $10bn.
According to SERAP, previous approvals in 2021 alone include $8.3bn; €490m, and
$6.1bn. The foreign debt stock of the Federal Government, 36 states, and
Federal Capital Territory reportedly stands at $37.9bn.
In an open letter dated December 18, 2021, and signed by
SERAP deputy director Kolawole Oluwadare, the organisation said, “A moratorium
on borrowing would create a temporary debt standstill, and free up fiscal space
for investment in Nigerians’ needs, as well as ensure sustainable economic and
social recovery from the COVID-19 pandemic.”
SERAP said, “Without a moratorium on borrowing, your
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.”
According to SERAP, “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 impact negatively on vulnerable and
marginalised Nigerians.”
The letter, read in part, “SERAP is concerned about the lack
of transparency and accountability in the spending of the loans so far
obtained, and opacity around the terms and conditions, including repayment
details of these loans.
“While the National Assembly has asked for these details in
future loan requests, it ought to have seen and assessed the terms and
conditions of these loans before approving them, in line with its oversight
responsibility under the Nigerian Constitution of 1999 [as amended].
“If not urgently addressed, the escalating borrowing and
looming debt crisis would cripple the ability of both the Federal Government
and the 36 states to deliver essential public services such as quality
healthcare, education, and clean water to the most vulnerable and marginalised
sectors of the population.
“SERAP notes that governments’ ability to protect 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 your government and many of the 36 states to fulfil 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 this year 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.
“The growing level of borrowing by your government and the
36 states is clearly a human rights issue because when the entire country is
burdened by unsustainable debts, there will be little money left to ensure
access of poor and vulnerable Nigerians to basic public services.
“While it is critical for the Federal Government and state
governments to have sufficient resources to fund their budgets, it is equally
critical for governments to substantially cut the cost of governance.
Persistent borrowing is neither sustainable nor fair to the Nigerian people.
“SERAP urges you to conduct a human rights assessment of the
borrowing by governments since 1999 to address the dire consequences of
unsustainable debts on people and communities across the country and to ensure
that borrowing at all levels of government considers the human rights impacts.
“Any such assessment should be conducted in harmony with
existing safeguards and mechanisms in order to contribute to informed
decision-making and to complement findings from a human rights perspective.
“A human rights impact analysis should serve to ascertain
the debts that can be repaid, and the resources necessary to ensure compliance
with the obligation of using the maximum available resources for the protection
and fulfilment of human rights.
“As the Committee on Economic, Social and Cultural Rights
has noted, States parties including Nigeria are under an obligation to devote
their maximum available resources to the full realization of all economic and
social rights, including the rights to health, education and water.
“SERAP also urges you to adopt effective measures to address
transparency and accountability gaps in spending of loans, and the systemic and
widespread corruption in ministries, departments and agencies, as documented by
the Office of the Auditor-General of the Federation.
“We would therefore be grateful if the recommended measures
are taken within 14 days of the receipt and/or publication of this letter. If
we have not heard from you by then, SERAP shall take all appropriate legal
actions to compel your government and the 36 states to comply with our
requests.”
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