Rafsanjani: African Civil Society Demands Total Reform, Transparency in IMF/ World Bank Governance Framework

Executive Director of Civil Society Legislative Advocacy Centre (CISLAC) and Head of Transparency International in Nigeria, Auwal Musa Rafsanjani, in a chat with newsmen on the sidelines of the recently concluded IMF/World Bank Annual Meetings, discussed the role of civil society at the meetings and advocated for stronger accountability mechanisms to ensure loans from these institutions are effectively monitored. Rafsanjani underscored the importance of reforming IMF and World Bank governance frameworks to ensure greater transparency, aiming to curb poverty and empower African nations. Nume Ekeghe presents excerpts:

 Why are you here at the IMF/World Bank Annual Meetings?

So, basically, as civil society, we are accredited to participate in this year’s IMF World Bank Annual Meeting. There are quite a number of issues and demands that civil society organizations have brought to this very important meeting, especially given the state of the economy in Africa and, by extension, in Nigeria.

 What specific reforms are CSOs in Africa advocating for?

So, first and foremost, civil society organisations across Africa are demanding and agitating for total reforms in the IMF, World Bank governance framework, and its relation with Africa generally.

Civil society organisations in Africa and Nigeria in particular, are demanding and requesting a total reform in the governance framework and relations, in IMF World Bank, this is because we believe that a need to democratise and ensure more transparency and accountability in the IMF World Bank framework.

Why is information-sharing so critical in this context?

It is absolutely important to understand that in many countries in Africa, the economy is scaling down and lack of information from both governments and countries and also from the IMF that will hold the government accountable for its financial dealings with financial institutions continue to create gaps, continue to create doubt, continue to create rumors.

And that is why civil society in a way of ensuring that we have a more credible financial system across the world that also works for the poor people; that also works for the disadvantaged countries, make this push. So, there are certain reforms that the IMF and World Bank can carry out and ensure that those reforms trickle down into those countries.

How can Nigeria’s government improve its economic policies?

One of the reforms that we really want to see happening is that there must be information sharing with the stakeholders, especially civil society organisations working on financial management issues. Many times our countries, do come to the IMF, World Bank and collect loans, including the parliament in those countries; they would just simply approve a loan request without knowing the details, and even when the loans are given, they do not have an idea on what implementation of those loans are. And therefore, you know, the citizens are left without knowledge on what those debts are used for.

Secondly, I think it is important that the Nigerian government, in particular, carry out serious reforms that can help bring about economic stability. Many of the economic indices that we have in Nigeria and Africa at large, did not suggest any positive outlook. For example, as a result of corruption in the economic sector, we are having a lot of backsliding in economic progress. A lot of factories and manufacturers are closing down, the government is not able to collect the necessary revenue from multinational corporations and some wealthy men and women in Nigeria in particular.

For example, recently, we conducted a research and we discovered that almost 90 percent of the rich men and women in Nigeria are not paying taxes, and for government to be able to have, development financing, you need to collect the appropriate taxation.

Again, property taxation is not also imposed in Nigeria. If the government wants money, they need to look at those areas that can bring in revenue to the country, and more importantly, also make those revenues judiciously used, and utilise them in a manner that will help address lingering poverty that Nigeria and Nigerians are faced with.

Again to have better economic reforms in the country, we need to look at how the country runs its financial system. We need to carry out a serious reform in the banking industry in Nigeria, because our banks are allegedly being used for money laundry, for illicit financial flow, and there’s no way you can use financial sector in a country like Nigeria to be doing tourism financing and then you want to have peace and stability in the country. So, there are a number of radical reforms that we expected the government to carry out, which include, reforms and strict oversight and regulation enforcement on our financial institutions in Nigeria and we are not seeing that much happening again.

 Nigeria must stop this reckless borrowing, because you have a lot of resources that you can take. For example, the multinational corporation, they are refusing to pay the necessary tax you know that they are supposed to give to the Nigerian government. We need to make sure that we collect those taxes and, you know, utilise them for the good of Nigeria.

Again, we also observe and noted that because of corruption, infrastructural dilapidation had risen to the level that the social sector, like health, educational sector and other physical infrastructure, have all gone down courtesy of corruption because when the resources are allocated to handle those areas, they are either diverted or wasted or even completely stolen. We cannot actually make economic progress when looting and stealing a misapplication of, you know, public tax money at the center of the scene.

 So, our coming here to this meeting is to demand more accountability in the financial dealings with African countries. We also want to make sure that the bank itself continues to communicate with other stakeholders so that there will be more accountability, more information sharing in the various countries.

It is a shame that many government officials will just come to sign a deal, and even their citizens are not aware of that, they cannot, therefore, hold government accounts, including even the parliament; the parliament does not know anything about the financial dealings that they do with their country.

So, it is important that the IMF World Bank democratise information and ensures that they create opportunities for interaction.

 I must also confess that as a result of our protest on how loans are collected and misapplied in Nigeria. During the COVID Nigeria approached the IMF World Bank with a request of $3.4 billion and we wrote to the IMF to say that, look, there must be an accountability mechanism in the use of this money. And the IMF and World Bank said that, okay, we will ensure that even though Nigeria is a sovereign country, we will ensure that we have some clauses that will enable the government to be at least transparent to its people.

Sadly, the Accountant General has reported that the $3.4 billion that has been collected cannot be accounted for, and this is the reason why we believe that all financial institutions must incorporate non-stakeholders, especially civil society, as part of the accountability mechanism for proper implementation of whatever loans or whatever agreement that they’ve signed with Nigeria.

 There are quite a number of other issues that we really want to talk about that can help to ensure more transparency in the economic system in the country because the poverty is too much and we believe that if poverty can be tackled, corruption can be tackled, we will see economic prosperity in Nigeria.

Nigeria is blessed with human and natural resources; we have no reason to be the capital of poverty of the world, to have the dilapidated infrastructure, or for our people to be jumping, traveling out by road or by sea, and in the process die. It is absolutely important that Nigeria, both at the state and the national level, wake up to utilise the potential that we have to make better for Nigeria and Nigerians.

 You made two very critical claims. One, you said that Nigerian banks are being used for money laundering and terrorism financing. Can you substantiate this claim and how did you come about it?

I will refer you to Inter-government Action Group Against Money Laundering (GIABA) ECOWAS. Nigeria is a member of ECOWAS, and in fact, Nigeria hosts ECOWAS Commission. And if you go and check the report of ECOWAS, you will see clearly where ECOWAS made that allegation. It is not me, so if you go and check, you will see where they made that allegation, and they didn’t just make the allegation. They do it with facts and evidence, and that is why we want to make sure that we strengthen Nigerian Finance Intelligence Unit (NFIU), EFCC, and make sure that our financial institutions are regulated properly so that they don’t become a conduit for money laundering.

And secondly, you are aware how banks have been used by so many unpatriotic Nigerians to siphon money. The whole illicit financial outflow is not coming from somewhere else It is coming from financial institutions. So, there are abundant evidence on how Nigerian financial institutions are being used for financing tourism.

In fact, the government had said that they got the names of so many terrorist financers, which they are using, of course, financial institutions. They are not using their pocket, you know, they’re using, you know, financial institutions to do that and some of the multinational cooperations that they are also taking Nigerian resources they are also using financial institutions.

 Are you certain that the $3.4 billion drawn down during COVID cannot be traced?

The Accountant General said that they cannot account for it. That the regime that collected the money but it is not able to account for it.