The Federal Government, led by President Bola Tinubu, has secured $6.45 billion in loans from the World Bank within just 16 months. This figure grew after the recent approval of three loans totaling $1.57 billion for various projects in Nigeria, with more loans expected in the coming months.
These new loans are part of a broader trend, with the World Bank approving 36 loan requests for Nigeria over five years, amounting to a significant total of $24.088 billion. These loans are primarily aimed at financing development projects across the country, though concerns are rising over Nigeria’s increasing debt burden and the sustainability of these financial commitments.
Some of the recent projects financed under Tinubu’s 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). However, many Nigerians express frustration over the government’s borrowing, pointing to a history of poor infrastructure and unemployment, despite previous loans.
Documents from the World Bank show that since 2020, the international lender has consistently provided credit to Nigeria each year. In 2020 alone, the World Bank approved 15 loan requests worth $6.36 billion, funding projects such as the Nigeria Rural Access and Agricultural Marketing Project ($510 million) and the Nigeria Digital Identification for Development project ($430 million).
In 2021, loan approvals dropped to six projects worth $3.2 billion, while in 2022, Nigeria secured $1.26 billion in loans under former President Muhammadu Buhari, including a $500 million livestock productivity project. In 2023, loans increased again to $2.7 billion for four projects, including a $750 million power sector recovery initiative.
As of 2024, the World Bank has approved $3.82 billion for five projects, including a $70 million grant. More loans are anticipated before the year ends, bringing the 2024 loan amount to $3.75 billion so far.
In June 2024, the World Bank approved $2.25 billion in loans aimed at economic stabilization and resource mobilization, with the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program receiving $1.5 billion and the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results receiving $750 million.
Additionally, the World Bank is expected to approve another $500 million loan by December 2024 for the Rural Access and Agricultural Marketing Project – Scale Up project. The World Bank stated that these credit facilities will help strengthen human capital, improve healthcare for women and children, and build resilience to climate change by enhancing dam safety and irrigation systems.
According to Nigeria’s Debt Management Office, the country owed the World Bank $15.59 billion as of March 31, 2024. Debt servicing expenses surged by 68.8% in the first half of 2024, reaching N6.04 trillion, compared to N3.58 trillion during the same period in 2023. This increase is largely attributed to the naira devaluation, which has significantly escalated foreign debt repayments, posing a growing challenge to the government’s financial resources.