Falana-Led ASCAB Demands Probe Into Alleged Diversion Of Nigeria’s $3.4Billion COVID-19 IMF Loan
Last week,the IMF confirmed to SaharaReporters that Nigeria had completed repayment of the emergency loan secured under the Rapid Financing Instrument (RFI), despite lingering concerns about the management and utilisation of the funds.
The Alliance on Surviving Covid-19 and Beyond (ASCAB) has called for an immediate criminal investigation into the alleged diversion of Nigeria’s $3.4 billion COVID-19 emergency loan from the International Monetary Fund (IMF), originally intended to mitigate the devastating impact of the pandemic in 2020.
Last week, the IMF confirmed to SaharaReporters that Nigeria had completed repayment of the emergency loan secured under the Rapid Financing Instrument (RFI), despite lingering concerns about the management and utilisation of the funds.
While Nigeria’s principal balance is said to have been cleared, charges totalling about $30 million annually, said to amount to SDR 125.99 million, approximately N275.28 billion, remain outstanding.
ASCAB in a statement issued on Sunday by its Chairman, human rights lawyer Femi Falana (SAN), demanded that the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) launch a thorough investigation into what it described as the “criminal diversion” of the loan.
The group also urged the IMF Board to probe its management’s failure to enforce governance protocols around the loan’s use.
In April 2020, at the height of the global pandemic, Nigeria obtained emergency funding of $3.4 billion from the IMF, an amount equivalent to the country’s full quota at the institution.
The funds were meant to stabilise Nigeria’s fragile economy, strengthen healthcare responses, protect jobs, and mitigate the effects of collapsing oil revenues.
At the time of the loan’s approval, IMF Deputy Managing Director Mitsuhiro Furusawa, emphasised the need for strong governance and transparency.
Furusawa stressed, “The publication and independent audit of crisis-mitigating spending and procurement processes is crucial to ensure emergency funds are used for their intended purposes.”
However, a 2020 audit report by Nigeria’s Office of the Auditor-General, released in January 2024, uncovered significant irregularities.
The report revealed that $2.4 billion of the IMF loan was transferred to the Central Bank of Nigeria’s (CBN) accounts in the U.S. and China, and was quickly moved into short-term investment vehicles without appropriate documentation or approvals.
The report further revealed that the funds were reclassified as part of the CBN’s external reserves, not the federal government’s holdings, undermining their original purpose.
Also, that $700 million was later monetised at an exchange rate higher than the official rate, with a 2% commission controversially deducted, and that by the end of 2020, $2.7 billion, approximately N1.02 trillion, remained unmonetised and unaccounted for.
The Auditor-General recommended sanctions and the recovery of the funds, urging referral of suspects to the EFCC and ICPC.
Despite the gravity of the findings, the National Assembly has yet to deliberate on the report or act on its recommendations.
ASCAB accused the lawmakers of attempting to cover up the scandal, in violation of Section 85(5) of the Nigerian Constitution, which mandates that relevant committees consider audit reports in a timely manner.
“Even though the Auditor-General of the Federation submitted the 2020 Annual Report to each House of the National Assembly, both Houses have failed to cause the report to be considered by the committees responsible for public accounts, in order to cover up the criminal diversion of the $3.4 IMF and several trillions of Naira set out in the Auditor-General’s report, in utter contravention of section 85(5) of the Constitution of the Federal Republic of Nigeria as amended,” ASCAB lamented.
ASCAB, therefore, demanded that the EFCC and ICPC immediately investigate and prosecute those responsible.
The group also demanded that the IMF suspend the collection of all remaining charges until a full probe is concluded, and that the interest earned on the diverted funds be recovered and remitted to the national treasury.
Falana stated, “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.
“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.
“Meanwhile, the IMF should 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.”
