The Federal Government of Nigeria, under the leadership of President Bola Tinubu, has secured loans worth $6.45 billion from the World Bank in just 16 months. This amount has increased due to the recent approval of three loans totaling $1.57 billion for various development projects in Nigeria.
This recent approval raises Nigeria’s total loan commitments from the World Bank to a staggering $24.088 billion over the past five years, with 36 loan requests approved. These loans finance key projects, including power, women’s empowerment, girls’ education, renewable energy, economic stabilization, and resource mobilization reforms.
Nigerians have expressed concerns about the country’s escalating debt profile in the tinubu administration, with growing doubts about the sustainability of these loans and their long-term impact on the Nigeria economy. Infrastructure decay, unemployment, and lack of transparency in previous borrowings have only added to these concerns.
Despite public anxiety, the international lender continues to approve loans to Nigeria. Since 2020, the World Bank has maintained annual credit approvals for the country, with projects ranging from agricultural marketing to digital identification, power sector reforms, and renewable energy.
World Bank Loans to Nigeria in 2024:
- $750 million for power sector recovery.
- $500 million for women’s empowerment.
- $570 million for healthcare strengthening.
- $500 million for irrigation and sustainable power.
According to a recent statement from the World Bank, the new loans will strengthen Nigeria’s human capital by improving healthcare for women, children, and adolescents. Additionally, they will support Nigeria’s resilience to climate change through better dam safety and irrigation projects.
With more loans expected by the end of 2024, the World Bank’s ongoing commitment highlights its focus on Nigeria’s economic stabilization and human capital development. However, the growing debt burden is becoming a pressing issue, with debt service costs increasing by 68.8% in the first half of 2024 compared to the same period in 2023. This surge is driven by factors such as the devaluation of the naira, which complicates foreign debt repayments.
While these loans are positioned as a means to drive development, concerns about their long-term impact on Nigeria’s fiscal health remain prominent. The balance between securing funds for critical infrastructure and managing a rising debt profile is increasingly delicate for the Federal Government.
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