World Bank debunks minister’s claim that its staff take 40% of loans to Nigeria

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THE World Bank has denied a recent allegation by the Nigerian minister of Women Affairs, Uju Kennedy-Ohanenye, that the Bank’s staff in Nigeria pocket 40 per cent of all loans Nigeria receives from the financial institution.

The Bank refuted the claim in an exclusive mail sent to The ICIR, noting its staff did not receive 40 per cent of project funds in “consultation fees,” as alleged by the minister.

It also disputed the claim by the minister that Nigerian officials were entitled to five per cent of project funds after signing loan agreements.

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The ICIR reported how Kennedy-Ohanenye accused the World Bank staff in Nigeria of pocketing 40 per cent of the loans given to Nigeria as consultation fees, while government officials who sign those loans get five per cent of the funds.

“All the loans they collect, including World Bank loans,  are you aware that the same World Bank staff in Nigeria take back 40 per cent and call it consultation fees?

“These are things you people should look into. You people should focus on where the problem is and let them leave me alone,” the minister said during a phone interview with THISDAY newspaper.

She also alleged that she was being victimised by the National Assembly and some cabals for refusing to sign a $500 million World Bank loan request.

“There is a $500 million loan that was meant to be signed by me, but I refused to sign. There was also a case of $100 million earlier as well. Find out what it was meant for,” the minister added.

 

World Bank reacts

Meanwhile, the World Bank, while responding to The ICIR’s queries on the issue, emphasised that projects funded by the Bank were implemented by recipient governments and were governed by strict policies designed to prevent the misuse of funds.

The Bank also noted that it worked closely with borrowers to manage procurement processes, ensuring that funds are used transparently and efficiently. Key contract award information, including details about the recipients and the purposes of the funds, is required to be published as a condition of Bank financing, the Bank said.

“In response to your query, please note that World Bank staff do not receive 40 per cent of project funds as “consultation fees”. Nor are ministers entitled to five per cent of project funds for signing loan agreements. Both assertions are unequivocally false.

“World Bank-funded projects are implemented by recipient governments and are governed by rigorous policies meant to prevent the misuse of funds and ensure they are used for the purposes intended.

“Under our Procurement Framework, the Bank works with borrowers to carefully manage the integrity of procurement processes in line with core principles that emphasise fair competition, transparency, and efficiency.

“Borrowers are required to publish key contract award information – who the contracts were awarded to, where the money goes, and for what purposes – as a condition for bank financing,” the organisation wrote.

It further claimed that project staff involved in World Bank-supported initiatives are employees of the government ministry that hired them, not of the World Bank.

“Furthermore, it is worth noting that the World Bank does not recruit project staff. Such is purely the responsibility of the government ministry in charge of the project. Project staff in World Bank-supported projects are not employees of the Bank, but employees of the government ministry that hired them.

“The World Bank has zero tolerance for fraud and corruption and takes very seriously our obligation to ensure that our funds are used for clearly defined activities for the benefit of the poorest and most vulnerable,” the statement added.

 

Loan distribution based on claim by women’s affairs minister

Meanwhile, through media reports, The ICIR gathered that Nigeria has secured $4.95 billion in loans from the World Bank since the beginning of President Bola Ahmed Tinubu’s administration in May 2023.

Infographic on loans Nigeria took from the World Bank under President Bola Ahmed Tinubu and amount that allegedly went to World Bank staff as claimed by the Nigerian minister of Women Affair, Uju Kennedy-Ohanenye.
Infographic on loans Nigeria took from the World Bank under President Bola Ahmed Tinubu and amount that allegedly went to World Bank staff as claimed by the Nigerian minister of Women Affair, Uju Kennedy-Ohanenye.

The amount was secured from six different loan requests: $750 million for the power sector, $500 million for women empowerment, $700 million for educating adolescent girls, another $750 million for renewable energy, $1.5 billion for economic stabilization reforms, and $750 million for resource mobilization reforms.

With the claim by Kennedy-Ohanenye, of the $4.95 billion secured by the country, $1.98 billion went for consultancy fees to the World Bank staff, meaning that only $2.97 billion was for the federal government to execute projects.

 

Nigeria’s current loan status 

According to the Country’s Debt Management Office (DMO), Nigeria’s total public debt portfolio rose by 24.99 per cent in three months to N121.67 trillion as of March 31, 2024.

The DMO in its latest report released on Thursday, June 20, declared that the federal government and the 36 states, including the Federal Capital Territory (FCT), owe $91.46 billion.

“Central Bank of Nigeria’s (CBN) official exchange rate of $1 to N1,330.26 as of March 31, 2024, was used in converting external debt to naira,” the DMO noted.

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Also, domestic debt rose to N65.65 trillion or $49.35 billion, representing 11.05 per cent increase relative to N59.12 trillion or $65.73 billion as of December 31, 2023.

External debt rose to N56.02 trillion or $42.12 billion, representing a 46.57 per cent increase compared to N38.22 trillion or $42.495 billion the debt office declared as of December 31, 2023.

Of the external debt, The ICIR reports that Nigeria’s current World Bank loan, as of March 31, is  $15.59bn, according to data from the DMO.

 

EDITOR’S NOTE:

*This report was republished from The ICIR. You can read the original EXCLUSIVE article here.

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