Nigeria’s $1.1bn loan request may be granted soon – W’Bank

The World Bank may approve a total of $1.13bn in loans for Nigeria before the end of March 2025 as part of ongoing efforts to support the country’s economic resilience, health security, and education reforms.

According to information published on the World Bank’s website, three key projects for Nigeria are at the stage of negotiation, with approval dates set for this month.

Among the projects set for negotiation is the Accelerating Nutrition Results in Nigeria 2.0 programme, valued at $80m, which is expected to be approved by March 31, 2025.

This initiative is aimed at improving nutrition outcomes, particularly among vulnerable groups, by enhancing access to essential dietary support and reducing malnutrition rates.

Another project in the negotiation phase is the Community Action for Resilience and Economic Stimulus Programme, which has a commitment value of $500m and is expected to be approved by March 24, 2025.

The project is designed to provide economic stimulus for community-driven initiatives to strengthen economic resilience and growth.

The HOPE for Quality Basic Education for All programme, with a proposed funding of $552.2m, is also at the negotiation stage and is expected to secure approval by March 31, 2025.

This initiative seeks to improve the quality of basic education by addressing infrastructure deficits, enhancing teacher training, and increasing educational accessibility across the country.

The potential approval of these loans comes at a time when Nigeria continues to grapple with economic challenges, including foreign exchange liquidity constraints, fiscal deficits, and mounting debt servicing obligations.

Earlier, The PUNCH reported that the Federal Government would likely secure six new loans totalling $2.23bn from the World Bank in 2025 as the international financial institution continues to support the country’s economic and structural reforms.

Data from the World Bank’s official website indicates that this will bring Nigeria’s total approved loans to $9.25bn over three years, reflecting a growing reliance on multilateral funding to support critical sectors of the economy, including infrastructure, healthcare, education, and economic resilience.

An analysis of Nigeria’s loan approvals from the World Bank since 2023 under the administration of President Bola Tinubu shows a significant increase in funding commitments.

In 2023, the World Bank approved loans amounting to $2.7bn, which primarily targeted projects in renewable energy, women’s empowerment, education, and the power sector.

The funding approvals recorded in 2024 significantly surpassed those of the previous year, with a total of $4.32bn allocated to various projects. This increase was largely due to Nigeria’s growing need for financial assistance to stabilise the economy amid mounting fiscal pressures and rising public debt.

For 2025, Nigeria is looking to secure six new loans from the World Bank, with a combined value of $2.23bn. The planned loans cover key sectors, such as digital infrastructure, healthcare, education, nutrition, and community resilience.

While the proposed World Bank loans could provide much-needed fiscal relief, concerns remain over the country’s rising debt burden. Recent data from the Central Bank of Nigeria indicate that the country has spent $5.47bn on external debt servicing in the past 14 months, highlighting the strain on its foreign reserves.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, earlier said that rather than accumulating more debt, the government is prioritising alternative funding sources such as revenue generation, concessional loans, and strategic investments.

“We are at that optimisation stage, where there is less focus on borrowing, particularly from the commercial markets, which is quite high. We are focusing more on optimising assets and attracting private sector investment, whether domestic or foreign,” Edun said.

However, the consistent growth in the World Bank’s financial commitments to Nigeria, from $2.7bn in 2023 to $4.32bn in 2024, and the anticipated $2.23bn in 2025, highlights the country’s increasing dependence on concessional financing to drive structural reforms and public sector investments.

Sunday PUNCH further observed that Nigeria has retained its position as the third-largest debtor to the World Bank’s International Development Association, despite its exposure dropping to $16.8bn as of December 31, 2024.

According to the World Bank’s latest financial statements for the fiscal year up to December 2024, Nigeria’s debt to the IDA dropped by $300m in three months from $17.1bn recorded in September 2024.

However, the current amount is still higher than the $16.5bn recorded in June 2024.

According to data from the external debt report released by the Debt Management Office, the World Bank’s share of Nigeria’s debt totals $17.32bn, with the majority owed to the International Development Association, which accounts for $16.84bn, which represents 39.14 per cent of Nigeria’s total external debt.

The International Bank for Reconstruction and Development, another arm of the World Bank, is owed $485.08m, or 1.13 per cent.