Human Rights Lawyer and Senior Advocate of Nigeria, Femi Falana, on Sunday, called for a thorough investigation into the alleged diversion of a $3.4 billion loan received from the International Monetary Fund (IMF) to tackle the COVID-19 pandemic.

Falana made the demand in a statement he personally signed and made available to PUNCH, urging anti-graft agencies to swing into action.

“It is pertinent to recall that in the wake of the COVID-19 in 2030, Nigeria requested emergency assistance of about US$3.4 billion — equivalent to 100 percent of its quota from the International Monetary Fund to shore up the country’s economy and help businesses weather the storm of a deadly pandemic that disrupted global markets and plunged the world into a recession,” Falana stated.

The IMF had last week confirmed that Nigeria fully repaid the loan secured under the Rapid Financing Instrument (RFI), with a principal balance of zero. However, charges including net charges, basic interest, and administrative fees amount to SDR 125.99 million—approximately N275.28 billion.

The loan, approved by the IMF Executive Board on April 28, 2020, was meant to support Nigeria’s healthcare sector and protect jobs and businesses from the economic fallout of the COVID-19 crisis and sharp oil price declines.

Following the board’s decision, Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair, had said, “The emergency financing under the RFI will provide much-needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support the government’s efforts and close the large financing gap. The implementation of proper governance arrangements—including through the publication and independent audit of crisis-mitigating spending and procurement processes—is crucial to ensure emergency funds are used for their intended purposes.”

Falana, however, accused both the IMF management and the Nigerian authorities of failing to uphold this commitment.

“Characteristically, the IMF Management, which jointly manages the neocolonial economy of Nigeria with the Federal Government, failed to ensure emergency funds were used ‘for their intended purposes’.”

He referenced a 2020 audit report by the Office of the Auditor-General of the Federation, made public in January 2024, which revealed discrepancies in the loan’s management.

According to the report, $2.4 billion was transferred to the Central Bank of Nigeria’s (CBN) account at the Federal Reserve Bank of New York, while the rest was sent to the CBN’s account at the Bank of China in Shanghai.

The audit noted that the funds were moved to the Bank for International Settlements and the Industrial and Commercial Bank of China without documented approval from the Federal Government or the CBN’s Investment Committee.

“These transactions, according to the audit, were not supported by documentation or approvals from the Federal Government or the CBN’s Investment Committee, and 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,” Falana argued.

He also pointed to a request by the Ministry of Finance on August 7, 2020, for $700 million to be monetised to support the federal budget. The CBN approved the request, applying an exchange rate of N379.5/$ instead of the official N360.5/$.

“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.

“The report recommended that the CBN Governor should explain the movement and classification of the funds without proper authorisation. It 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. 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.”

Falana added that the Auditor-General also recommended the recovered funds be remitted to the public treasury and evidence submitted to the Public Accounts Committee of the National Assembly.

The report also called for the prosecution of anyone involved.

“The report recommended that anyone suspected to be involved should be ‘sanctioned and handed over to the EFCC and ICPC for investigation and prosecution, as provided for in paragraph 3112 of the Financial Regulations’.”

He lamented that despite the submission of the audit report to both chambers of the National Assembly, no action has been taken.

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“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, 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.”

Falana, speaking on behalf of the Alliance on Surviving Covid-19 and Beyond, demanded immediate action by the anti-corruption agencies.

“Given the foregoing, the Alliance on Surviving Covid-19 and Beyond 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.”

He urged the IMF to halt any charges on the loan until a proper investigation is conducted.

“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.”