Nigeria will repay a $500 million concessional loan to the World Bank from 2029 to 2054 for primary healthcare improvements. The loan targets maternal and child health, emergency care, and pandemic preparedness, with funding managed by key health agencies. Additional loans are being discussed to enhance economic resilience and education, despite ongoing concerns about rising debt.
The Nigerian Federal Government is set to start repaying a $500 million concessional loan from the International Development Association, beginning in 2029 and continuing until 2054. This financing agreement, recorded by Sunday PUNCH, supports the Nigeria Primary Healthcare Provision Strengthening Programme (HOPE-PHC), which targets enhancements in primary healthcare, emphasizing maternal and child health, emergency medical care, and preparedness for pandemics.
Management of the funds will be overseen by the Federal Ministry of Health and Social Welfare and various key agencies, including the National Primary Healthcare Development Agency, the National Health Insurance Authority, and the Nigeria Centre for Disease Control. State governments will also participate through their health-related ministries and boards.
The loan repayment will occur bi-annually, with payments scheduled for every April 15 and October 15. Nigeria will pay the principal at an annual interest rate of 1.65% until 2049, which will rise to 3.40% from 2049 to 2054. Alongside this, a commitment charge of 0.5% on unutilized funds and a 0.75% service charge on drawn funds will apply. Total repayment costs may vary due to currency fluctuations.
Disbursement of funds will align with specified healthcare performance indicators, ensuring that financing correlates with measurable achievements. Indicators include increasing access to primary healthcare, improving emergency obstetric and neonatal care, enhancing medicine supply chains, and bolstering pandemic response frameworks.
Funds will additionally focus on strengthening digital health infrastructure, improving climate resilience within the health sector, and boosting enrollment of vulnerable populations into health insurance schemes. Despite the attractive loan terms, Nigeria’s rising external debt and debt service responsibilities raise concerns, particularly as the naira continues to depreciate, which could increase the real repayment costs.
Approved on September 26, 2024, this loan has an operational phase beginning in fiscal year 2025, concluding by June 30, 2029. This suggests a four-year operational timeline unless further extended, followed by 25 years of repayments.
The World Bank is considering a total of $1.13 billion in additional loans for Nigeria before March 2025 to support economic resilience, health security, and educational reforms. Upcoming projects include the $80 million Accelerating Nutrition Results in Nigeria 2.0 program, aimed at addressing nutrition for vulnerable groups, and a $500 million Community Action for Resilience and Economic Stimulus Programme designed for community-driven economic initiatives.
Another project targeting education is the HOPE for Quality Basic Education for All, with $552.2 million under negotiation. This initiative aims to improve basic education quality through addressing infrastructure gaps and enhancing teacher training.
Nigeria faces economic challenges, including foreign exchange constraints, fiscal deficits, and increasing debt servicing costs. Recent figures from the Central Bank indicate that $5.47 billion was spent on external debt servicing from January 2024 to February 2025, underscoring the growing burden on the nation’s fiscal health and foreign reserves.
The Nigerian Federal Government will begin repaying a $500 million concessional loan to the World Bank starting in 2029, designed to strengthen healthcare services. While the loan presents financial assistance, concerns about Nigeria’s rising debt levels persist. Additional loans are under negotiation to support economic resiliency and educational initiatives, further complicating the fiscal landscape. Addressing these issues is essential for Nigeria’s overall economic stability.
Original Source: punchng.com
