The World Bank is set to approve $632 million in loans to Nigeria, focusing on nutrition and education. This follows a recent $500 million loan approval for economic stimulus support, despite ongoing issues with fund disbursement for prior loans. Concerns about Nigeria’s rising debt and strategic borrowing approaches persist among experts as the government seeks to manage economic challenges effectively.
The World Bank is poised to approve two loans totalling $632 million to Nigeria today. This funding aims to enhance nutrition and improve basic education, critical sectors for the country’s development agenda. Specifically, the loans consist of $80 million for the “Accelerating Nutrition Results in Nigeria 2.0” project and $552 million for the “HOPE for Quality Basic Education for All” program, both currently awaiting final approval.
These loans are part of a strategic initiative by the World Bank to bolster Nigeria’s development, focusing on healthcare and education. This funding is expected to strengthen the government’s efforts in improving nutrition outcomes and increasing access to quality education for children across the nation. Additionally, just last Friday, the World Bank approved a separate $500 million loan aimed at supporting Nigeria’s Community Action for Resilience and Economic Stimulus Program, enhancing economic support for vulnerable populations.
This Economic Stimulus Program is designed to assist households facing economic crises, providing grants to bolster community resilience. Following the approval on March 28, 2025, the program aims to counteract inflation and provide economic opportunities amid rising living costs, particularly for families hit hardest by recent economic challenges.
However, Nigeria is currently experiencing delays in the disbursement of prior loans aimed at supporting the poor. The World Bank reported that $315 million of an $800 million loan for the National Social Safety-Net Program has been disbursed, with the program’s fund release delayed due to identified fraud concerns.
President Bola Tinubu recently initiated a social safety net program aimed at distributing financial assistance to millions as part of poverty alleviation efforts. However, ongoing investigations into the management of these funds have prompted the suspension of cash transfer programs aimed at ensuring more transparent handling of finances.
The World Bank has expressed commitments to sanction individuals or entities associated with fraud in these programs. With Nigeria’s increasing reliance on loans, it is projected the country may secure up to $2.23 billion in additional loans from the World Bank in 2025, further spotlighting its dependence on multilateral funding for key sectors such as infrastructure, education, and economic resilience.
Recent approval trends indicate that under President Tinubu’s administration, Nigeria has garnered loans amounting to $7.45 billion from the World Bank across various projects. This has raised concerns regarding Nigeria’s increasing external debt burden, which, as of the third quarter of 2024, has reached approximately $17.32 billion.
Although the new loans may provide essential fiscal relief, the Central Bank of Nigeria indicates that the country has spent approximately $5.47 billion on external debt service, revealing strain on its foreign reserves. In light of these challenges, Finance Minister Wale Edun affirmed the government’s prioritization of revenue generation and strategic investments rather than amplifying borrowing.
Experts in economic development underline the need for strategic fund utilization to ensure that these loans yield tangible benefits. Development economist Dr. Aliyu Ilias voiced concerns that current borrowing practices might hinder economic recovery despite notable revenue increases achieved since Tinubu’s administration.
Dr. Tayo Aduloju, CEO of the Nigerian Economic Summit Group, emphasized the need for a balanced approach to borrowing. He proposed creative borrowing strategies, including prioritizing domestic investments while attracting foreign direct investment, to foster sustainable economic growth without excessive reliance on loans.
The World Bank’s impending approval of $632 million in loans to Nigeria highlights the country’s strategic focus on improving critical sectors like education and nutrition. Despite these developments, Nigeria faces significant challenges regarding rising debt and past loan disbursements. With projected future loans and increasing reliance on external financing, experts caution against unsustainable borrowing practices, advocating a more balanced and strategic approach to fiscal management to ensure long-term economic stability.
Original Source: punchng.com
