SERAP Sues Buhari Over $25bn Overdrafts Taken From CBN

Socio-Economic Rights and Accountability Project (SERAP) has
filed a lawsuit, asking the court “to compel President Muhammadu
Buhari to disclose spending details of the overdrafts and loans
obtained from the Central Bank of Nigeria (CBN) since May 29, 2015
including the projects on which the overdrafts have been spent, and
repayments of all overdrafts to date.”

SERAP is also seeking an order to compel the president to
“explain and clarify whether the $25bn (N9.7trn) 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 is arguing that: “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.”

Joined in the suit as respondents are the Attorney General of
the Federation and Minister of Justice, Abubakar Malami, SAN; the
Minister of Finance, Budget and National Planning, Zainab Ahmed;
and the Governor of CBN, Godwin Emefiele.

SERAP is also arguing that: “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.”

According to SERAP: “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.”

SERAP is also arguing that: “The Nigerian Constitution, Freedom
of Information Act, and these treaties rest on the basic principle
that citizens should have access to information regarding their
government’s activities.”

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.’”

“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.’”

“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.”

“SERAP has consistently recommended to the Federal Government to
reduce its level of borrowing and to look at other options of how
to finance its budget, such as reducing the costs of governance,
and addressing systemic and widespread corruption in ministries,
departments and agencies (MDAs) that have been documented by the
Office of the Auditor-General of the Federation.”

“Our requests are brought in the public interest, and in keeping
with the requirements of the Nigerian Constitution; the Freedom of
Information Act; the Fiscal Responsibility Act; the Central Bank
Act; the Debt Management Office Act; and the country’s
international legal obligations.”

“There is a statutory obligation on the respondents, being
public officers in their respective public offices, to proactively
keep, organize and maintain all information or records about CBN
overdrafts, loans, and repayments in a manner that facilitates
public access to such information or records.”

“Mandamus lies to secure the performance of a public duty in the
performance in which the applicant has a sufficient legal
interest.”

“Unless the reliefs sought by SERAP are granted, the respondents
will not provide SERAP with the information requested and will
continue to be in breach of their constitutional responsibilities
and the country’s international legal obligations and
commitments.”

No date has been fixed for the hearing of the suit.

Socio-Economic Rights and Accountability Project (SERAP) has
filed a lawsuit, asking the court “to compel President Muhammadu
Buhari to disclose spending details of the overdrafts and loans
obtained from the Central Bank of Nigeria (CBN) since May 29, 2015
including the projects on which the overdrafts have been spent, and
repayments of all overdrafts to date.”

SERAP is also seeking an order to compel the president to
“explain and clarify whether the $25bn (N9.7trn) 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 is arguing that: “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.”

Joined in the suit as respondents are the Attorney General of
the Federation and Minister of Justice, Abubakar Malami, SAN; the
Minister of Finance, Budget and National Planning, Zainab Ahmed;
and the Governor of CBN, Godwin Emefiele.

SERAP is also arguing that: “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.”

According to SERAP: “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.”

SERAP is also arguing that: “The Nigerian Constitution, Freedom
of Information Act, and these treaties rest on the basic principle
that citizens should have access to information regarding their
government’s activities.”

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.’”

“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.’”

“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.”

“SERAP has consistently recommended to the Federal Government to
reduce its level of borrowing and to look at other options of how
to finance its budget, such as reducing the costs of governance,
and addressing systemic and widespread corruption in ministries,
departments and agencies (MDAs) that have been documented by the
Office of the Auditor-General of the Federation.”

“Our requests are brought in the public interest, and in keeping
with the requirements of the Nigerian Constitution; the Freedom of
Information Act; the Fiscal Responsibility Act; the Central Bank
Act; the Debt Management Office Act; and the country’s
international legal obligations.”

“There is a statutory obligation on the respondents, being
public officers in their respective public offices, to proactively
keep, organize and maintain all information or records about CBN
overdrafts, loans, and repayments in a manner that facilitates
public access to such information or records.”

“Mandamus lies to secure the performance of a public duty in the
performance in which the applicant has a sufficient legal
interest.”

“Unless the reliefs sought by SERAP are granted, the respondents
will not provide SERAP with the information requested and will
continue to be in breach of their constitutional responsibilities
and the country’s international legal obligations and
commitments.”

No date has been fixed for the hearing of the suit.