The Federal Government, led by President Bola Tinubu, has successfully obtained loans totaling $6.45 billion from the World Bank within a span of 16 months.
This figure has risen following the recent endorsement of three additional loans amounting to $1.57 billion for various initiatives in Nigeria, with expectations of further increases in the upcoming months.
In total, the international financial institution has approved at least 36 loan applications from the Federal Government, culminating in a significant sum of $24.088 billion over the past five years.
These approvals, intended to support a range of development projects across the country, come amid growing concerns regarding the nation’s rising debt levels, raising questions about the viability of these financial obligations and their potential long-term impact on the economy.
Among the projects initiated under Tinubu's administration are loans for power generation ($750 million), women's empowerment initiatives ($500 million), girls' education programs ($700 million), renewable energy projects ($750 million), economic stabilization reforms ($1.5 billion), and resource mobilization reforms ($750 million).
For many Nigerians, the prolonged deterioration of infrastructure and rising unemployment have fostered a sense of resentment towards the government's borrowing plans.
While some citizens acknowledge the reality of limited resources given the large population, they contend that previous borrowings have not been adequately justified.
However, an analysis of documents sourced from the international lender's website on Tuesday revealed that the institution has consistently approved annual credit to the nation since 2020.
A brief review indicated that in 2020, the lender sanctioned 15 loan requests totaling $6.36 billion. Notable projects included the Nigeria Rural Access and Agricultural Marketing Project, which received a commitment of $510 million, the Nigeria Digital Identification for Development project ($430 million), and $750 million allocated for the Nigeria SATAN additional financing in response to COVID-19, among others.
A loan request amounting to $500 million was sanctioned for a livestock productivity and resilience support initiative on March 18, 2022. Additionally, a loan of $750 million was authorized under the Nigeria: State Action on Business Enabling Reforms Program within the same year.
Furthermore, $3.9 million was allocated to the Umbrella organization to assist women's projects in Nigeria.
In 2023, however, the loan request escalated to $2.7 billion for the execution of four projects, which include $750 million for the Nigeria-AF power sector recovery performance-based operation, $500 million for the Nigeria for Women Program Scale-up projects, and $750 million for the Nigeria Distributed Access through Renewable Energy scale-up project.
In a similar vein, the bank has already approved $3.82 billion in 2024 for five projects, which encompasses a grant of $70 million.
This indicates that the total loan amount for 2024 has reached $3.75 billion, with additional credit facilities anticipated before the conclusion of the current year.
The World Bank has sanctioned a series of loans to Nigeria, focusing on essential sectors such as economic reforms, resource mobilization, education for adolescent girls, and the expansion of renewable energy.
It is noteworthy that on June 13, the World Bank disclosed the approval of two loan projects designed to enhance Nigeria’s economic stability and support its vulnerable populations.
As per a statement from the bank, the total package amounts to $2.25 billion, which includes the $1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and the $750 million Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.
To date, the international lender has received $751.88 million of the $1.5 billion allocated under the Nigeria Reforms for Economic Stabilization to Enable Transformation.
The World Bank is anticipated to approve an additional loan request of $500 million by December 16, 2024, for the Rural Access and Agricultural Marketing Project – Scale Up initiative.
Last week, a statement was issued regarding the recent approval by the international lender, which indicated that the credit facilities are intended to assist the government in enhancing human capital through improved health services for women, children, and adolescents.
Furthermore, it was noted that the approved initiatives would contribute to building resilience against climate change impacts, including floods and droughts, by enhancing dam safety and irrigation systems.
The statement declared, “The World Bank has today approved three operations totaling $1.57 billion to support the Government of Nigeria in strengthening human capital through improved health for women, children, and adolescents, as well as in building resilience against climate change effects such as floods and droughts by enhancing dam safety and irrigation.”
The international lender specified that this new funding comprises $500 million aimed at addressing governance challenges that hinder the delivery of education and health services, $570 million allocated for the Primary Healthcare Provision Strengthening Programme, and $500 million designated for the Sustainable Power and Irrigation for Nigeria Project.
“The HOPE-GOV and HOPE-PHC programs together will assist the Government of Nigeria in enhancing service delivery within the basic education and primary healthcare sectors, which are vital for improving Nigeria’s human capital outcomes.
“The SPIN project will facilitate the enhancement of dam safety and the management of water resources for hydropower and irrigation in selected regions of Nigeria.
“The HOPE-GOV Programme will aid Nigeria in tackling fundamental governance deficiencies within the systems and procedures of government in two critical human development sectors,” it emphasized.
The approval, granted on September 26, 2024, underscores the World Bank’s dedication to fortifying Nigeria’s human capital and enhancing resilience against climate-related challenges.
According to the external debt stock report from the Debt Management Office, Nigeria's total debt to the World Bank amounts to $15.59 billion as of March 31, 2024.
Nigeria's debt servicing costs amounted to N6.04 trillion in the first half of 2024, representing a substantial increase of 68.8 percent compared to the N3.58 trillion reported in the corresponding period of 2023, according to the latest figures from the Central Bank of Nigeria.
This significant escalation in debt service obligations, likely influenced by the devaluation of the naira affecting foreign debt repayments, underscores the increasing strain on the government, as debt repayment now occupies a considerable share of its financial resources.
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