The Alliance on Surviving COVID-19 and Beyond (ASCAB), a coalition of 70 labour and civil society organisations (CSOs), has urged the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to investigate the alleged diversion of Nigeria’s $3.4 billion COVID-19 loan.
On May 8, the International Monetary Fund (IMF) said Nigeria will pay $30 million annually as special drawing rights (SDR) charges for the loan the country obtained to mitigate the impact of COVID-19 and the steep drop in oil prices in 2020.
In a statement signed by Femi Falana, a human rights lawyer and ASCAB chairperson, the group said earlier investigations alleged the funds were diverted.
“In view of the foregoing, the Alliance on Surviving Covid-19 and Beyond (ASCAB) hereby calls on the Economic and Financial Crimes Commission and the Independent Corrupt Practices and Other Related Offences Commission to investigate the criminal diversion of the $3.4 billion loan obtained by Nigeria to fight the Covid-19 pandemic,” the statement reads.
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“We also call on the IMF Board to probe the deliberate refusal of its Management to ensure that the emergency funds were used for their intended purposes.”
The group also called on the IMF to “suspend the collection of the scheduled charges, including net charges, basic interest and administrative fees, amounting to SDR 125.99 million (N275.28 billion) pending the conclusion of its investigation”.
‘WHY FG SHOULD PROBE $3.4BN IMF LOAN’
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In 2020, Nigeria requested emergency assistance of about $3.4 billion — equivalent to 100 percent of its quota from the IMF.
On April 28, 2020, at the meeting of the IMF executive board, the financial support of $3.4 billion was approved to provide critical support to shore up Nigeria’s healthcare sector and shield jobs and businesses from the shock of the COVID-19 crisis.
However, the Falana-led coalition said the IMF management, which jointly manages the neocolonial economy of Nigeria with the federal government, “failed to ensure” the emergency funds were “used for their intended purposes”.
The statement noted that a 2020 audit report by the office of the auditor-general of the federation, released in January 2024, flagged several irregularities in the handling of the fund.
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Citing the audit report, ASCAB said on April 30, 2020, the report noted that “$2.4 billion of the loan was transferred to the CBN’s account at the Federal Reserve Bank of New York, while the remaining balance went to the CBN’s account at the Bank of China, Shanghai”.
“The report further stated that by June 1, the $2.4 billion had been moved to the Bank for International Settlements (BIS) for short-term investments. The funds in China were similarly transferred to the Industrial and Commercial Bank of China (ICBC),” the group said.
“These transactions, according to the audit, were not supported by documentation or approvals from the Federal Government or the CBN’s Investment Committee and that the funds were subsequently reclassified as part of the CBN’s external reserves rather than the Federal Government’s holdings.
“This reclassification, the report noted, allowed interest to be earned on the funds, contrary to the emergency spending purpose for which they were approved.”
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Furthermore, the report noted that on August 7, 2020, the ministry of finance “requested the monetisation of $700 million to support the 2020 federal budget”.
One week later, ASCAB said “the CBN approved a debit of N265.65 billion, applying an exchange rate of N379.5/$, higher than the official N360.5/$ rate at the time”.
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“The funds were credited to three separate accounts: N252 billion to the COVID-19 Public Sector Account, N13.3 billion to the Forex Equalisation Account and N350 million to the Exchange Commission Account,” the group said.
“The audit noted that a 2% commission was deducted from the monetised amount, even though the funds were categorised as Federal Government property. At the end of 2020, an unmonetised balance of $2.7 billion — equivalent to approximately N1.02 trillion — remained unaccounted for, according to the Auditor-General’s report.
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“The report recommended that the CBN Governor should explain the movement and classification of the funds without proper authorisation.”
The report, ASCAB said, also requested bank statements to confirm the unmonetised balance and demanded the recovery of N13.3 billion and N350 million into the federal government’s account.
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“It further called for the remittance of all interest earned from the investments and warned that sanctions under relevant financial regulations would be applied if there was no accountability,” the group said.
ASCAB criticised the national assembly for ignoring the 2020 auditor-general’s report.
Although submitted as required, the group said neither the senate nor the house of representatves has reviewed the report through their public accounts committees.
According to the coalition, the inaction hides the misuse of $3.4 billion from the IMF and trillions of naira flagged in the report.
The group added that it violates section 85(5) of the constitution, which mandates legislative oversight of public accounts.
