The World Bank is poised to approve fresh loans totaling $632 million for Nigeria today (Monday), intensifying concerns over the country’s rising debt profile.
The loans are earmarked to enhance key sectors, including nutrition and basic education.
Details from the World Bank’s official website on Sunday revealed that the two loans under consideration are $80 million for the Accelerating Nutrition Results in Nigeria 2.0 initiative and $552 million for the HOPE for Quality Basic Education for All program.
Both projects are currently in the negotiation phase, with final approval expected later today. These loans align with the World Bank’s broader strategy to bolster Nigeria’s development efforts, particularly in healthcare, education, and community resilience.
The funding aims to reinforce the government’s initiatives to improve nutrition outcomes and expand access to quality education for Nigerian children.
Meanwhile, last Friday, the World Bank approved a separate $500 million loan for Nigeria under the Community Action for Resilience and Economic Stimulus Programme.
The approval, which occurred on March 28, 2025, marks a significant intervention aimed at tackling economic challenges by expanding access to livelihood support, food security services, and grants for vulnerable households and businesses.
Titled the ‘NIGERIA: Community Action (for) Resilience and Economic Stimulus Programme,’ the initiative seeks to provide crucial assistance to struggling communities, offering grants to mitigate economic hardships.
The funding is expected to support grassroots economic stimulation, particularly in the face of inflation and high living costs. The stimulus package prioritizes food security and economic empowerment for communities most affected by recent financial difficulties.
This approval comes against the backdrop of a delay in the disbursement of a previous $800 million World Bank loan meant for poor and vulnerable Nigerians.
Data from The PUNCH indicated that only $315 million has been released so far, leaving a substantial portion of the loan pending. The delay is believed to be linked to fraud-related concerns within the program.
President Bola Tinubu had earlier introduced a social safety net initiative to provide N25,000 to 15 million households for three months, aligning with the 2023 International Day for the Eradication of Poverty.
The Federal Ministry of Humanitarian Affairs and Poverty Alleviation was responsible for implementing the $800 million loan project.
However, allegations of misappropriation led to a suspension of the cash transfer initiative for further review.
Former Minister Betta Edu was suspended amid accusations of diverting N585 million meant for palliative distribution.
Similarly, her predecessor, Sadiya Umar-Farouq, is currently under investigation by the Economic and Financial Crimes Commission over alleged mismanagement of N37.1 billion during her tenure.
The World Bank has issued sanctions against individuals and businesses found guilty of fraudulent activities under these programs.
Previous reports from The PUNCH indicated that the Federal Government is seeking six additional loans totaling $2.23 billion from the World Bank in 2025.
This follows a pattern of increasing reliance on external financing to support economic and structural reforms.
Data from the World Bank’s website suggests that Nigeria’s total approved loans will reach $9.25 billion over three years, reflecting a growing dependence on multilateral funding for sectors such as infrastructure, healthcare, education, and economic stability.
An analysis of World Bank loan approvals under President Bola Tinubu’s administration reveals a substantial increase in financial commitments.
In 2023, the World Bank approved $2.7 billion in loans, supporting initiatives in renewable energy, women’s empowerment, education, and power sector improvements.
By 2024, loan approvals surged to $4.32 billion, driven by Nigeria’s pressing need for financial aid amid economic difficulties.
In 2025, the country is expected to secure six new loans worth $2.23 billion, targeting digital infrastructure, healthcare, education, nutrition, and community resilience.
Since President Tinubu took office, Nigeria has secured approximately $7.45 billion in World Bank loans, fueling concerns about mounting debt.
According to the Debt Management Office, Nigeria’s total external debt owed to the World Bank stands at $17.32 billion as of the third quarter of 2024.
The majority of this debt, amounting to $16.84 billion, is owed to the International Development Association, making up 39.14% of Nigeria’s total external debt.
The International Bank for Reconstruction and Development, another branch of the World Bank, is owed $485.08 million, accounting for 1.13%.
Although these loans offer fiscal relief, concerns persist over Nigeria’s increasing debt burden. Recent figures from the Central Bank of Nigeria show that the country has spent $5.47 billion on external debt servicing over the past 14 months, raising alarms about the strain on foreign reserves.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, previously stated that the government is prioritizing alternative funding mechanisms over accumulating more debt.
“We are at that optimization stage, where there is less focus on borrowing, particularly from the commercial markets, which is quite high. We are focusing more on optimizing assets and attracting private sector investment, whether domestic or foreign,” Edun said.
Despite this, the steady rise in World Bank loan commitments from $2.7 billion in 2023 to $4.32 billion in 2024, with an anticipated $2.23 billion in 2025, underscores Nigeria’s increasing reliance on concessional financing for economic reforms and public sector investments.
As Nigeria grapples with its debt obligations, experts stress the need for effective fund management and transparent project execution to maximize the economic and social impact of these loans.
Development economist Dr. Aliyu Ilias voiced concerns about Nigeria’s borrowing strategy, warning that the country’s economic state makes continuous borrowing a risky approach.
“I think borrowing itself is not bad, but at the point Nigeria is now, borrowing is becoming a bad thing,” he said.
He recalled the widespread criticism of borrowing under former President Muhammadu Buhari and noted that many had hoped the current administration would take a different approach. Ilias also emphasized that the Tinubu government has generated more revenue than any administration since the Fourth Republic in 1999.
He highlighted various revenue-generation strategies, including the removal of fuel subsidies, increased electricity tariffs for Band A, and proposed tax reforms. Additionally, the Federal Inland Revenue Service reported a significant revenue boost earlier this year, leading to an upward revision of the national budget.
Given these revenue increases, Ilias questioned why the government continues to borrow instead of optimizing existing resources. He also criticized the reliance on the debt-to-GDP ratio as a debt sustainability measure, warning that a proposed rebasing of Nigeria’s GDP could justify further borrowing.
“I was expecting that in the first four years of President Bola Tinubu’s administration, the government would not embark on borrowing,” he stated.
At a media interactive session in Abuja over the weekend, Nigerian Economic Summit Group CEO, Dr. Tayo Aduloju, stressed the need for a well-structured borrowing approach.
“We need to be creative about the borrowing plan. How much domestic borrowing we need to do. How much external borrowing we need to do, and at what price,” he said.
Aduloju emphasized the importance of balancing domestic and external loans while ensuring that funds are allocated efficiently to critical infrastructure projects. He noted that a well-planned borrowing strategy could improve project execution and public perception.
He further urged Nigeria to prioritize foreign direct investment over excessive borrowing as a more sustainable approach to economic development.
