The Federal Government of Nigeria is actively engaging with the World Bank to obtain two fresh loans totaling $580 million, with approval expected by March 2025. These loans are a component of a broader plan to support the country’s development objectives and address critical sectors. The first loan, dubbed “HOPE for Quality Basic Education for All,” is scheduled to be approved on the 20th of March, 2025, and it seeks $553.8 million in funding. This endeavor seeks to provide access to high-quality education, especially in marginalized regions, through the implementation of programs to improve school enrollment and retention rates, educating educators, and enhancing educational infrastructure.
With an anticipated approval date of April 8, 2025, the second loan, dubbed the “Solutions for the Internally Displaced and Host Communities Project,” calls for a $300 million commitment. This initiative aims to offer long-term solutions for internally displaced people (IDPs) and their host communities, with an emphasis on enhancing living conditions, access to necessary services, and economic prospects. These proposed loans are a part of a broader World Bank financing package worth $1.65 billion, which also includes the $800 million-seeking “Accelerating Nutrition Results in Nigeria 2.0” initiative.
Approved World Bank loans under Tinubu reach $6.95 bn.
This initiative is aimed at improving nutritional outcomes in Nigeria, particularly for disadvantaged populations, and is slated for a decision meeting on the 20th of February, 2025. The World Bank’s continued support demonstrates its dedication to Nigeria’s growth, focusing on vital sectors including social welfare, health, and education. It is anticipated that these projects would be crucial in tackling the nation’s urgent issues and fostering sustainable development. Nigeria has obtained a number of sizable loans from the World Bank to tackle important developmental issues across multiple sectors in recent years.
In the last 18 months, Nigeria has obtained $6.95 billion in World Bank loans under President Bola Tinubu’s leadership. The most recent one was the Rural Access and Agricultural Marketing Project—Scale Up, a $500 million Loan approved on the 13th of December, 2024, which aims to enhance rural infrastructure, agricultural market access, and social cohesion in rural areas.This is the tenth loan project approved under Tinubu’s leadership. Previously in June 2023, the World Bank approved a $750 million loan for the Power Sector Recovery Performance-Based Operation and a $500 million loan for the Nigeria for Women Program Scale-Up.
Growing concerns over external debt and borrowing policy.
Furthermore, in September 2023, a $700 million loan was granted for the Adolescent Girls Initiative for Learning and Empowerment, and in December 2023, a $750 million loan was approved for the Distributed Access through Renewable Energy Scale-Up Project. In September 2024, a Finance package of $1.57 billion was approved for water management, education, and healthcare, while in June 2024, a $2.25 billion loan was given to the Economic Stabilization and Resource Mobilization Programs. These loans are reportedly aimed at developing Nigeria’s infrastructure, healthcare, education, and economic recovery, among other developmental issues.
Overall, this has brought the World Bank’s share of Nigeria’s external debt, currently at $16.32bn, with the International Development Association (IDA) accounting for the bulk of this figure. Nigeria’s borrowing policy has been generating controversy, with some arguing that an over-reliance on borrowing from outside sources could jeopardize the country’s long-term Economic Stability and capacity to repay its debt. Already, Nigeria’s total public debt has increased to ₦142.3 trillion as of September 30, 2024, a 5.97% rise (N8.02 trillion) from ₦134.3 trillion in June 2024, according to data released by the Debt Management Office (DMO).
Related Article: FG allocates 47% of budget to loan servicing
Amidst growing external debt, the first nine months of 2024 saw Nigeria spend $3.58 billion on foreign debt servicing, a 39.77% increase over the $2.56 billion spent during the same period in 2023. When converted to Naira terms, this increase represents the combined effects of growing domestic borrowing and the impact of exchange rate depreciation on external debt. The trend is anticipated to persist in 2025 given that the Federal Government has already set aside ₦15.81 trillion for debt servicing in its economic plan, while also continuing to explore more loan options.