President Bola Ahmed Tinubu’s administration is seeking approval for fresh loans worth $4.4 billion from the World Bank and the African Development Bank (AfDB) over the next year. This comes as concerns grow over the increasing costs of servicing Nigeria’s external debt.
In the past 12 months, the government has borrowed $4.95 billion from the World Bank, raising the country’s total public debt to ₦101 trillion. As of December 2023, Nigeria’s public debt stood at approximately ₦97 trillion, according to data from the Debt Management Office.
Recent Loan Approvals
An analysis by The PUNCH revealed that the World Bank approved funding for six projects under the current administration:
– $750 million for power sector financing
– $500 million for women’s empowerment
– $700 million for girl child education
– $750 million for renewable energy solutions
– $750 million for resource mobilisation reforms
– $1.5 billion for economic stabilisation reforms
Specific Loan Details
– June 9, 2023: The World Bank approved $750 million for Nigeria’s power sector recovery performance-based operation.
– June 27, 2023: A $500 million loan was approved to support women’s empowerment through the Nigeria for Women Programme.
– September 2023: A $700 million loan was granted for the Adolescent Girls Initiative for Learning and Empowerment project, aimed at improving secondary education access for girls in select states.
– December 14, 2023: A $750 million loan for the Distributed Access through Renewable Energy Scale-up project, aiming to provide electricity to over 17.5 million Nigerians.
– Latest Approval: $2.25 billion, including $1.5 billion for economic stabilisation reforms and $750 million to enhance non-oil revenues and protect oil and gas revenue.
New Loan Pursuits
The government is also seeking:
– $500 million for rural road infrastructure and agricultural marketing
– $750 million for reintroducing telecom tax and other fiscal measures
– $500 million for addressing challenges faced by Internally Displaced Persons (IDPs)
– $2.7 billion in economic and budget support from the AfDB
African Development Bank (AfDB) Involvement
The AfDB has been engaged in ongoing discussions for further support:
– $134 million for an emergency food production plan
– $1.7 billion in economic and budget support loans
– $1 billion for agro-industrial processes in 28 states
Impact of Rising Debt
While the World Bank and AfDB aim to support Nigeria’s economic growth through various projects, there is increasing concern among Nigerians about the country’s growing debt. Long years of infrastructure decay and high unemployment rates have fueled public skepticism about the benefits of these loans.
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Nigeria has been a significant recipient of loans from multilateral lenders, borrowing $2.7 billion in 2023 alone. According to the Bretton Woods Institution, its technical advisory and financing support to Nigeria currently stands at over $15 billion. The Debt Management Office reports that Nigeria owes the World Bank a total of $15.45 billion as of December 31, 2023.
Despite President Bola Tinubu’s commitment to reducing reliance on borrowing, the pursuit of additional loans raises questions about the country’s fiscal strategy. The high cost of servicing foreign debt could divert resources from critical sectors like healthcare, education, and infrastructure, exacerbating socio-economic challenges.
