The Federal Government of Nigeria is set to acquire $4.4 billion in new loans, further increasing the nation’s public debt, which currently stands at N101 trillion. In the past year alone, Nigeria has secured $4.95 billion in loans from the World Bank, exacerbating concerns about the rising costs of servicing external debt.
As of December 2023, the Debt Management Office reported Nigeria's public debt at approximately N97 trillion. The government anticipates new loan approvals from the World Bank and the African Development Bank (AfDB) over the next year.
Analysis reveals that the World Bank has approved funding for several projects: $750 million for power sector financing, $500 million for women empowerment, $700 million for girl child education, $750 million for renewable energy solutions, $750 million for resource mobilization reforms, and $1.5 billion for economic stabilization reforms.
Key loan approvals by the World Bank include:
- $750 million on June 9, 2023, for Nigeria’s power sector recovery.
- $500 million on June 27, 2023, for the Nigeria for Women Programme.
- $700 million in September 2023 for the Adolescent Girls Initiative for Learning and Empowerment project.
- $750 million on December 14, 2023, for the Distributed Access through Renewable Energy Scale-up project.
Additionally, the World Bank has approved $2.25 billion for economic stabilization reforms, aiming to increase fiscal oil revenues, boost non-oil revenues, expand social safety nets, and raise the import value of previously banned products.
Looking ahead, the government expects $4.4 billion in new loans from the World Bank and AfDB, including:
- $500 million for rural road infrastructure and agricultural marketing.
- $750 million contingent on reintroducing telecom tax and other fiscal measures.
- $500 million for addressing challenges faced by Internally Displaced Persons.
- $2.7 billion in economic and budget support from the AfDB.
AfDB President Akinwumi Adesina revealed in March that its Board approved $134 million for Nigeria's emergency food production plan, and ongoing talks include a $1.7 billion economic and budget support loan and a $1 billion agro-industrial process initiative.
The World Bank, dedicated to reducing global poverty, continues to support Nigeria with loans for infrastructure, education, healthcare, and environmental projects. Despite these efforts, many Nigerians express dissatisfaction with the government's borrowing practices, citing long-standing infrastructure decay and high unemployment rates.
Nigeria remains a significant recipient of loans from multilateral lenders, borrowing $2.7 billion in 2023 compared to $2.9 billion in 2022. The World Bank recently reported that its technical advisory and financing for Nigeria's economic growth exceed $15 billion, with the country owing the institution $15.45 billion as of December 31, 2023.
President Bola Tinubu has committed to reducing Nigeria’s dependency on borrowing, yet the administration continues to seek credit from both domestic and external lenders. The rising costs of servicing foreign debt pose substantial challenges, potentially diverting resources from critical sectors like healthcare, education, and infrastructure, and exacerbating socio-economic issues.
