The Federal Government, led by President Bola Tinubu, has secured loans totaling $6.45 billion from the World Bank in just 16 months. This figure has increased following the recent approval of three new loans amounting to $1.57 billion for various development projects in Nigeria, with expectations for further increases in the coming months.
In total, the World Bank has approved 36 loan requests to the Nigerian government, amounting to a substantial $24.088 billion over the past five years. These approvals aim to finance critical development projects nationwide, amid rising concerns about Nigeria’s escalating debt profile and the sustainability of these financial commitments.
Key projects under the Tinubu administration include loans for power ($750 million), women’s empowerment ($500 million), girls’ education ($700 million), renewable energy ($750 million), economic stabilization reforms ($1.5 billion), and resource mobilization reforms ($750 million).
Many Nigerians express frustration over the government’s borrowing plans, stemming from years of infrastructure decay and rising unemployment. While some acknowledge the need for funding given the large population, there is skepticism regarding the effectiveness of previous borrowings.
An analysis of documents from the World Bank shows a consistent pattern of annual credit approvals for Nigeria since 2020. In 2020 alone, the bank approved 15 loan requests worth $6.36 billion, including $510 million for the Nigeria Rural Access and Agricultural Marketing Project and $430 million for the Nigeria Digital Identification for Development project.
In 2021, the number of loan requests fell to six projects worth $3.2 billion, while in 2022, Nigeria secured loans totaling $1.26 billion for six projects, including $500 million for a livestock productivity project.
For 2023, loan requests increased to $2.7 billion, covering four projects such as $750 million for power sector recovery and $500 million for women’s empowerment. In 2024, five projects have already received approval for a total of $3.82 billion, which includes a $70 million grant.
The World Bank’s strategic approvals focus on essential sectors such as economic reforms, resource mobilization, adolescent girls’ education, and renewable energy expansion. On June 13, 2024, the bank announced the approval of two significant loan projects, totaling $2.25 billion, aimed at enhancing Nigeria’s economic stability.
According to a statement from the bank, the approved financing will bolster human capital development, particularly in health for women, children, and adolescents, while also enhancing resilience against climate change through improved dam safety and irrigation.
As of March 31, 2024, Nigeria owes the World Bank a total of $15.59 billion. Debt servicing costs reached N6.04 trillion in the first half of 2024, a sharp increase of 68.8% from N3.58 trillion in the same period the previous year. This rise in debt obligations reflects the increasing burden on the government as repayments consume a significant portion of its financial resources.
Gathered by: Praise Inalegwu