SERAP Urges Buhari to Provide Spending Details of $25bn CBN Overdrafts

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By Udora Orizu

Socio-Economic Rights and Accountability Project (SERAP) has urged President Muhammadu Buhari to provide spending details of the overdrafts and loans obtained from the Central Bank of Nigeria (CBN) by the federal government from 1999 to 2015, as well as clarify whether the $25 billion overdraft reportedly obtained from the CBN is within the five per cent limit of the actual revenue of the government for 2020.

In the Freedom of Information request dated March 6, 2021 and signed by SERAP Deputy Director, Kolawole Oluwadare, it said disclosing details of CBN overdrafts and repayments would enable Nigerians to hold the government to account for its fiscal management and ensure that public funds are not diverted, thereby improving the ability of your government to effectively respond to the COVID-19 crisis.

The FoI request read in part: “The recent overdraft of $25.6bn (about N9.7trn) obtained from the CBN would appear to be above the five-per cent 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-per cent 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 per cent of the previous year’s actual revenue of the federal government.

”The CBN is prohibited from granting any further overdrafts until all outstanding overdrafts have been fully repaid. Under the CBN Act, ‘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.

“We would be grateful if the requested information is provided to us within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then, the Incorporated Trustees of SERAP shall take all appropriate legal actions to compel your government to comply with our request.”