The Federal Government, led by President Bola Tinubu, has secured loans totaling $6.45 billion from the World Bank over a 16-month period. This figure rose after the World Bank recently approved three new loans amounting to $1.57 billion for various projects in Nigeria. The total is expected to increase further in the coming months.
Over the past five years, the World Bank has approved 36 loan requests for Nigeria, amounting to $24.08 billion, aimed at funding various development projects. However, these loans have raised concerns about Nigeria’s growing debt profile, leading to questions about the sustainability and long-term impact on the economy.
Some of the significant 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).
While many Nigerians acknowledge the country’s need for resources due to its large population, there is growing discontent about the government’s borrowing, as previous loans have not shown clear results.
An analysis of data from the World Bank shows a consistent pattern of annual loan approvals for Nigeria since 2020. In that year, the World Bank approved 15 loan requests totaling $6.36 billion, funding projects such as the Nigeria Rural Access and Agricultural Marketing Project ($510 million) and Nigeria’s COVID-19 response ($750 million). In 2021, six loan requests were approved, totaling $3.2 billion. The following year, under former President Muhammadu Buhari, Nigeria secured $1.26 billion for six projects, including a $500 million livestock productivity project and a $750 million business reforms program.
In 2023, loans increased to $2.7 billion, funding projects like the power sector recovery ($750 million) and renewable energy expansion ($750 million). In 2024, the World Bank approved $3.82 billion for five projects, including a $70 million grant, bringing the loan total for the year to $3.75 billion, with additional approvals expected before the year ends.
The World Bank loans have focused on sectors like economic reforms, resource mobilization, adolescent education, and renewable energy. Notably, in June 2024, the World Bank approved two major loans totaling $2.25 billion to bolster Nigeria’s economic stability and support vulnerable populations. This package included $1.5 billion for economic stabilization reforms and $750 million for resource mobilization.
The World Bank is set to approve another $500 million loan for Nigeria’s Rural Access and Agricultural Marketing Project in December 2024. These loans aim to strengthen human capital through better health services for women, children, and adolescents, while also enhancing Nigeria’s resilience to climate change by improving dam safety and irrigation systems.
According to Nigeria’s Debt Management Office, as of March 31, 2024, Nigeria’s total debt to the World Bank stands at $15.59 billion. Meanwhile, debt servicing costs have surged, with Nigeria spending N6.04 trillion on debt repayment in the first half of 2024, a significant increase from N3.58 trillion during the same period in 2023. This rise in debt service obligations, likely driven by naira devaluation, underscores the financial strain caused by the growing debt burden on the government’s finances.
Micheal has over 5 years experience in digital journalism. He’s a New Media Expert with an interest in Human Development and Global Politics.