Fiscal Prudence Demanded: FG Urged To Return $800 Million World Bank Loan Amid Fuel Subsidy Postponement

• The Nigerian Government borrowed $800 million from the World Bank to cushion the effect of fuel subsidy removal but postponed the removal and still has the loan.

• CISLAC, an advocacy group, urges the government to return the loan due to the worsening debt crisis and reckless spending.

• The group calls for financial watchdogs to monitor public spending to avoid further debt traps.

EKO HOT BLOG reports that the Federal Government has been told to return the World Bank’s $800 million loan meant for cushioning fuel subsidy removal.

It would be recalled that the federal government took a World Bank’s $800 million loan as a palliative to cushion the effect of the proposed fuel subsidy removal by June.

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However, the government reversed its proposal on the removal, saying it needs more time to prepare for it.

But, in his reaction, the Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa-Rafsanjani, in a statement, said the government should return the loan since the removal of the fuel subsidy has been postponed.

Musa-Rafsanjani queried President Muhammadu Buhari’s administration over its alleged nonchalant attitude towards the country’s crippling debt crisis.

The CISLAC boss noted that fears of the country getting another $800 million loan from the World Bank sends waves of worries in the minds of Nigerians as Nigeria’s revenue collection in 2022 stood at N10 trillion, with a debt of about N77 trillion.

He said that borrowing to fund post-fuel subsidy removal palliatives is strange and that “if the fuel subsidy removal process has been suspended as announced by the Minister of Finance after the NEC meeting at the end of April, then the government should return the borrowed money because what are we taking the loan for?

“In 2022, Nigeria paid about N7 trillion in fuel subsidy, and in 2023 from January to June, when the country intends to stop paying the subsidy is N3.6 trillion so if we are paying such whopping amount of money when subsidy is removed, we should have enough savings instead of taking additional loans, we can use the subsidy funds for post fuel subsidy removal.

“As a matter of fact, we don’t need to borrow. What we need to do is to cut waste. Just recently, we all saw the aviation minister announce that he bought 10 firefighting trucks for over 12 billion naira. Is this what we are borrowing to spend on

“Also, we read that the Minister of Communication and Digital Economy announced the approval of 24.2 billion to provide internet facilities at airports and some institutions amongst other places. These are the things we are spending on few weeks before the end of this administration and this is unacceptable.”

He condemned the alleged reckless spending of this administration in the last weeks, saying it’s totally unnecessary and it’s a clear sign of diversion of public funds for personal interest and not for the overall good of the country.

He called on the financial watch-dogs of the country to spotlight all public spendings that have not followed an adequate procurement process.

The CISLAC Executive Director said: “What’s the need for acquiring fighter trucks towards the end of an administration a position you have held for over 8 years but you find no need to acquire the trucks until the end, this is a clear sign of contracts scams that don’t follow due process and public interest it is simply a financial recklessness.

“And Nigeria as a nation that is so swamped up in debts we can’t afford that right now because where’s the public interest in that elephant project

“Also, the Minister of Communications has gone ahead to get an approval of FEC for N24.2bn for internet access at airports and universities but these are services that naturally should be done by service providers.

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“Nigeria is already in another debt trap. Records from both national and international financial and debt institutions regarding Nigeria’s debt reveal a state in crisis.”

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