The World Bank is set to approve a $632 million loan package to Nigeria aimed at enhancing nutrition and basic education. This loan follows a previous approval of $500 million to support economic resilience programs. Concerns persist regarding Nigeria’s rising debt and effective utilization of funds, as the country prepares for further loans in 2025. Experts emphasize the importance of efficient resource management over excessive borrowing.
The World Bank is poised to approve a loan package of $632 million to Nigeria on Monday, as reported by The PUNCH. This funding is intended for key initiatives including nutrition improvement and access to quality basic education. The loans comprise $80 million dedicated to the Accelerating Nutrition Results in Nigeria 2.0 project and $552 million for the HOPE for Quality Basic Education for All program, both scheduled for final approval today.
These loans form part of the World Bank’s overarching strategy to bolster Nigeria’s development agenda, primarily focusing on healthcare, education, and community resilience. They aim to enhance nutrition outcomes and improve educational access for children in Nigeria. Additionally, a $500 million loan was approved last Friday to support Nigeria’s Community Action for Resilience and Economic Stimulus Programme.
Launched on March 28, 2025, this program aims to tackle Nigeria’s economic challenges by providing livelihood support, food security services, and grants to help vulnerable households and businesses. The initiative is designed to offer essential support to those affected by economic downturns, mitigating their hardships while bolstering community resilience.
A review by The PUNCH indicates that approximately $315 million from the previously approved $800 million for the National Social Safety-Net Program Scale-Up has been disbursed, although funding has stalled for over a year, likely due to detected fraud issues under the program. Consequently, the Federal Government has had to suspend the cash transfer program pending investigations.
Under scrutiny are former ministers involved in alleged misappropriation of funds intended for economic relief programs, highlighting ongoing issues within the disbursement of aid. Additionally, the World Bank has imposed sanctions on individuals committing fraud relating to these initiatives.
Looking ahead, the Nigerian government is expected to secure six new loans totaling $2.23 billion from the World Bank in 2025, contributing to a projected total of $9.25 billion in approved loans over three years. This reflects Nigeria’s increasing dependency on multilateral funding to sustain crucial sectors, including infrastructure, healthcare, and education.
An analysis reveals that the World Bank’s loan approvals have escalated significantly since 2023, with $2.7 billion approved that year and $4.32 billion allocated in 2024, reflecting heightened financial needs due to economic strains. The planned loans for 2025 are set to cover vital sectors such as digital infrastructure, healthcare, and community resilience.
President Bola Tinubu’s administration has obtained approximately $7.45 billion from the World Bank within two years, raising concerns over the nation’s escalating debt levels. Currently, the World Bank accounts for $17.32 billion of Nigeria’s external debt, primarily owed to the International Development Association.
Despite the potential for fiscal relief from upcoming loans, apprehensions persist regarding Nigeria’s growing debt burden. Recent data reveals substantial expenditures on external debt servicing, underscoring a strain on foreign reserves. In light of this, Finance Minister Wale Edun stated the government is prioritizing alternative funding sources, including revenue generation and strategic investments, rather than excessive borrowing.
Experts have cautioned against Nigeria’s current borrowing strategy, emphasizing the need for efficient resource management and minimizing reliance on debt. Dr. Aliyu Ilias notes that while borrowing can be beneficial, it has become problematic given Nigeria’s economic challenges. He urges the government to leverage revenue gains from various reforms instead.
Dr. Tayo Aduloju, CEO of the Nigerian Economic Summit Group, advocates for a strategic and balanced approach to borrowing, suggesting prioritization of infrastructure projects tied to disciplined financing. He emphasizes the importance of attracting foreign direct investment as a more sustainable path forward, moving away from excessive borrowing towards a more resilient economic model.
In summary, the World Bank’s upcoming approval of $632 million in loans to Nigeria seeks to enhance nutrition and education, reinforcing the nation’s development strategy. Despite this financial support, concerns over Nigeria’s rising debt levels remain pertinent, indicating a need for careful management of resources and borrowing practices. As the government navigates economic challenges, experts emphasize the importance of efficient fund utilization and reaching a balance between domestic and international financing. Moving forward, the suggestion for strategic investments over excessive borrowing stands as a crucial point for sustaining the nation’s economic health.
Original Source: punchng.com
