Human rights lawyer, Femi Falana, SAN, has urged the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to investigate the alleged criminal diversion of the $3.4 billion loan secured from the International Monetary Fund (IMF) by Nigeria to combat the COVID-19 pandemic.
He made the call in a statement signed on behalf of the Alliance on Surviving COVID-19 and Beyond (ASCAB) on Sunday.
Falana also called on the IMF board to investigate what he described as the deliberate failure of its management to ensure that the emergency funds were used for their designated purposes.
He further appealed to the IMF to suspend all scheduled charges—comprising net charges, basic interest, and administrative fees—totalling SDR 125.99 million (approximately ₦275.28 billion), until investigations are concluded.
Last week, the IMF confirmed that Nigeria had fully repaid the $3.4 billion financial assistance it received under the Rapid Financing Instrument (RFI) during the COVID-19 crisis.
While Nigeria’s principal loan balance now stands at zero, outstanding charges still total SDR 125.99 million, translating to roughly ₦275.28 billion at the prevailing exchange rate.
“It is worth recalling that at the height of the COVID-19 crisis in 2020, Nigeria sought emergency funding amounting to $3.4 billion—equivalent to 100 per cent of its IMF quota—to stabilise the economy and support businesses amidst a global recession,” Falana said.
Following the IMF Executive Board’s meeting on April 28, 2020, the support was approved to bolster Nigeria’s healthcare system and protect jobs and businesses from the economic shock. The funds were also intended to help manage the impact of plummeting oil prices and falling international reserves.
According to Falana, “After the Executive Board’s discussion of Nigeria’s request, the Deputy Managing Director, Mr Mitsuhiro Furusawa, stressed the importance of good governance—specifically, the publication and independent auditing of emergency expenditure.”
“However, the IMF management, which co-manages Nigeria’s neo-colonial economy with the Federal Government, failed to ensure the funds were utilised as intended,” he added.
A 2020 audit report by the Office of the Auditor-General of the Federation, published in January 2024, flagged several irregularities in the management of the funds.
The report revealed that on April 30, 2020, $2.4 billion of the loan was transferred to the Central Bank of Nigeria’s (CBN) account at the Federal Reserve Bank of New York, while the remainder was sent to the CBN’s account at the Bank of China in Shanghai.
By June 1, the funds had reportedly been moved to the Bank for International Settlements (BIS) for short-term investments. Similar transfers occurred with the funds held in China, which were moved to the Industrial and Commercial Bank of China (ICBC).
The audit claimed that these transactions lacked the necessary documentation or approval from the Federal Government or the CBN’s Investment Committee. The funds were subsequently reclassified as part of the CBN’s external reserves, rather than being held as Federal Government assets. This reclassification allowed the funds to accrue interest, contrary to their emergency expenditure purpose.
Furthermore, the report stated that on August 7,2020, the Federal Ministry of Finance requested the monetisation of $700 million to support the 2020 budget. A week later, the CBN approved a debit of ₦265.65 billion, applying an exchange rate of ₦379.5 to the dollar—above the official rate of ₦360.5 at the time.
The proceeds were distributed as follows: ₦252 billion to the COVID-19 Public Sector Account, ₦13.3 billion to the Forex Equalisation Account, and ₦350 million to the Exchange Commission Account.
The audit also noted that a two per cent commission was deducted from the monetised amount, even though the funds were classified as Federal Government property. At year-end, an unmonetised balance of $2.7 billion—equivalent to approximately ₦1.02 trillion—remained unaccounted for.
The report called on the CBN Governor to explain the movement and reclassification of the funds and requested bank statements to confirm the unmonetised balance. It also recommended the recovery of ₦13.3 billion and ₦350 million into government coffers and the remittance of all interest accrued. The report warned of sanctions under existing financial regulations in the absence of accountability.
Falana noted that the Auditor-General has demanded the recovery and remittance of the funds to the national treasury, along with proof of remittance to the Public Accounts Committee of the National Assembly.
He added that the Auditor-General recommended that any individual implicated should be sanctioned and handed over to the EFCC and ICPC for investigation and possible prosecution, as stipulated in paragraph 3112 of the Financial Regulations.
“Although the Auditor-General submitted the 2020 Annual Report to both Houses of the National Assembly, neither chamber has considered it, in an apparent effort to cover up the criminal diversion of the IMF loan and trillions of naira highlighted in the report,” Falana said.
“Consequently, ASCAB is calling on the EFCC and ICPC to investigate the criminal diversion of the $3.4 billion COVID-19 loan. We also urge the IMF board to probe its management’s refusal to enforce proper use of the emergency funds. In the interim, the IMF should halt the collection of all related charges until the investigation is concluded.”