Falana Seeks Probe Into Alleged Diversion Of $3.4bn IMF Loan
THECONSCIENCE NG reports that prominent human rights lawyer, Femi Falana, SAN, has called on the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to investigate the alleged diversion of the $3.4 billion loan secured by Nigeria from the International Monetary Fund (IMF) during the COVID-19 pandemic.
Falana made the call in a statement issued on behalf of the Alliance on Surviving COVID-19 and Beyond (ASCAB) on Sunday.
He also urged the IMF board to investigate what he described as the deliberate failure of the IMF management to ensure that the emergency funds were used for their intended purposes. In the meantime, he called on the IMF to suspend the collection of all associated charges—including net charges, basic interest, and administrative fees—amounting to SDR 125.99 million (approximately N275.28 billion), pending the conclusion of investigations.
This development follows the IMF’s confirmation last week that Nigeria has fully repaid the $3.4 billion Rapid Financing Instrument (RFI) it received in 2020 to address the economic impact of the pandemic. Despite clearing the principal loan, Nigeria still owes related charges totaling SDR 125.99 million.
Citing comments from IMF Deputy Managing Director, Mitsuhiro Furusawa, Falana recalled that the IMF had emphasized the need for transparency and independent audits to ensure that emergency funds were properly utilized.
“Characteristically, the IMF management, which jointly manages Nigeria’s neocolonial economy with the Federal Government, failed to ensure the emergency funds were used for their intended purposes,” he said.
Falana referenced a 2020 audit report by the Office of the Auditor-General of the Federation, released in January 2024, which uncovered multiple irregularities in the handling of the IMF loan.
According to the report, $2.4 billion of the loan was transferred on April 30, 2020, to the Central Bank of Nigeria’s (CBN) account at the Federal Reserve Bank of New York. The balance was moved to the CBN’s account at the Bank of China in Shanghai. By June 1, the entire $2.4 billion had reportedly been moved to the Bank for International Settlements (BIS) for short-term investments, while the funds in China were transferred to the Industrial and Commercial Bank of China (ICBC).
Falana pointed out that the audit noted a lack of documentation or approvals from the Federal Government or the CBN Investment Committee for these transactions. The funds were subsequently reclassified as part of the CBN’s external reserves, allowing interest to be earned—contrary to the intended emergency expenditure purpose.
The report further revealed that on August 7, 2020, the Federal Ministry of Finance requested the monetization of $700 million to support the federal budget. The CBN approved a debit of N265.65 billion using an exchange rate of N379.5/$, which exceeded the official rate of N360.5/$ at the time.
The funds were distributed across three accounts: N252 billion to the COVID-19 Public Sector Account, N13.3 billion to the Forex Equalisation Account, and N350 million to the Exchange Commission Account. A 2% commission was also deducted from the monetised amount, despite the funds being classified as federal property.
At the end of 2020, an unmonetised balance of $2.7 billion—about N1.02 trillion—remained unaccounted for, according to the report.
The Auditor-General’s report recommended that the CBN Governor provide explanations for the movement and classification of the funds without due authorization. It also called for the recovery of N13.3 billion and N350 million into the federal treasury, the remittance of all interest earned, and sanctions for any breaches of financial regulations.
Falana stressed that the Auditor-General also urged that those involved be handed over to the EFCC and ICPC for investigation and possible prosecution, in line with Paragraph 3112 of Nigeria’s Financial Regulations.
He further criticized the National Assembly for failing to act on the Auditor-General’s findings, alleging a deliberate cover-up of the fund’s diversion, which he said violates Section 85(5) of the Nigerian Constitution.
“In view of the foregoing, the Alliance on Surviving COVID-19 and Beyond (ASCAB) hereby calls on the EFCC and ICPC to investigate the criminal diversion of the $3.4 billion loan obtained by Nigeria to fight the COVID-19 pandemic,” Falana said.
“We also urge the IMF board to investigate its management’s failure to monitor the disbursement and use of the funds, and to immediately suspend all related charges until accountability is ensured.”
