The Federal Government, under the leadership of President Bola Tinubu, has secured loans worth $6.45bn from the World Bank in just 16 months.
The amount increased to the new figure following the recent approval of three new loans totalling $1.57bn from the World Bank for various projects in Nigeria and is expected to increase further in the coming months.
This was as the international lender approved no fewer than 36 loan requests to the Federal Government, amounting to a substantial total of $24.088bn within five years.
These approvals, aimed at financing various development projects nationwide, arrive alongside increasing concerns about the country’s escalating debt profile, prompting questions about the sustainability of these financial commitments and their potential long-term effects on the economy.
Some of the projects under Tinubu include loans for power ($750 million), women empowerment ($500 million), girl’s education ($700 million), renewable energy ($750 million), economic stabilization reforms ($1.5 billion) and resource mobilization reforms ($750 million),
For many Nigerians, long years of infrastructure decay and increased unemployment have triggered an increased feeling of bitterness whenever they hear the government’s intention to borrow.
Although some of them realistically agree that resources are thin, considering an outsized population; however, they believe the past borrowings have not been justified.
However, according to an analysis of documents obtained from the international lender website on Tuesday, the international lender has maintained an annual credit approval to the nation since 2020.
A cursory look showed that the lender approved 15 loan requests worth $6.36bn in 2020. Some of these projects include the Nigeria Rural Access and Agricultural Marketing Project with an approved project commitment of $510m, The Nigeria Digital Identification for Development project ($430m), and $750m for the Nigeria SATAN additional financing for COVID-19 response, amongst others.
In 2021, the loan requests were reduced to six projects worth $3.2bn while the nation, under the administration of former president Mohammadu Buhari, secured loans worth $1.26bn in 2022 for six projects.
For instance, a $500m loan request was approved for a livestock productivity and resilience support project on March 18, 2022. Another loan of $750m was approved under the Nigeria: State Action on Business Enabling Reforms Program in the same year.
Also, $3.9m was secured for the Umbrella organisation to support Nigeria for women’s projects.
However, in 2023, the loan request increased to $2.7bn to implement four projects, namely $750m for Nigeria- AF power sector recovery performance-based operation, $500m for Nigeria for Women Program Scale-up projects and $750m for the Nigeria Distributed Access through Renewable Energy scale-up project.
Similarly, the bank has approved $3.82bn already in 2024 for five projects, which include a grant of $70 million.
This means that the loan amount was $3.75bn so far in 2024, with more credit facilities expected before the end of the current year
The World Bank has approved a series of loans to Nigeria, strategically targeting critical sectors such as economic reforms, resource mobilization, adolescent girls’ education, and renewable energy expansion.
Recall that on June 13, the World Bank announced the approval of two loan projects aimed at bolstering Nigeria’s economic stability and supporting its vulnerable populations.
According to a statement from the bank, the combined package, totalling $2.25bn, comprises the $1.5bn Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and the $750m Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.
Already, the international lender has received $751.88m of the $1.5bn under the Nigeria Reforms for Economic Stabilisation to Enable Transformation.
The World Bank is expected to approve another loan request worth $500m by December 16, 2024, for the Rural Access and Agricultural Marketing Project – Scale Up project.
According to a statement released last week announcing the latest approval, the international lender said the credit facilities will help the government strengthen human capital through better health for women, children and adolescents.
It added that the approved projects would also help build resilience to the effects of climate change, such as floods and drought, by improving dam safety and irrigation.
The statement read, “The World Bank has today approved three operations for a total of $1.57bn to support the Government of Nigeria in strengthening human capital through better health for women, children and adolescents and building resilience to the effects of climate change such as floods and droughts through improving dam safety and irrigation.”
The international lender stated that this new financing includes $500m for addressing governance issues that constrain the delivery of education and health, $570m for the Primary Healthcare Provision Strengthening Programme and $500m for the Sustainable Power and Irrigation for Nigeria Project.
“The HOPE-GOV and HOPE-PHC programmes combined will support the Government of Nigeria to improve service delivery in the basic education and primary healthcare sectors which are critical towards improving Nigeria’s human capital outcomes.
“The SPIN project will support the improvement of dams’ safety and management of water resources for hydropower and irrigation in selected areas of Nigeria.
“The HOPE-GOV Programme will support Nigeria to address underlying governance weaknesses in the systems and procedures of government in two key human development sectors,” it noted.
The approval, made on September 26, 2024, highlights the World Bank’s commitment to strengthening Nigeria’s human capital and building resilience in the face of climate threats.
Data from the external debt stock report of the Debt Management Office shows that Nigeria owes the World Bank a total of $15.59 billion as of March 31, 2024.
Nigeria’s debt servicing expenses reached N6.04tn in the first half of 2024, marking a sharp increase of 68.8 per cent from the N3.58tn recorded during the same period in 2023, the latest data from the Central Bank of Nigeria showed.
This sharp rise in debt service obligations, likely driven by naira devaluation for foreign debt repayments, reflects the growing burden on the government as debt repayment consumes a significant portion of its financial resources.