Nigeria has only received approximately 16% of the entire loan sanctioned by the World Bank under President Bola Tinubu’s term.
Based on a disbursement data analysis from the World Bank website, the loans totaling $4.95 billion were approved for a range of initiatives including social welfare, infrastructural development, and economic stabilization.
But just $774.99 million had been distributed as of July 31, 2024, raising questions regarding the rate at which projects are carried out and funds are used.
An overview of approved loans.
The World Bank has authorized some loans to Nigeria that are specifically aimed at vital areas like resource mobilization, education for teenage females, economic reforms, and the expansion of renewable energy sources.
Notwithstanding these permissions, the data highlights difficulties in project execution and funding distribution by showing a sizable discrepancy between the authorized sums and the actual expenditures.
These loans reach $4.95 billion in total, of which a sizeable $4.16 billion is currently pending payment.
- The Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing (DPF) project is one of the most well-known of these efforts. This project, which has been allocated $1.5 billion, is currently in the disbursement process; however, since its approval on June 13, 2024, only roughly $751.88 million has been given to Nigeria.
- The four primary goals of the RESET DPF are to: raise fiscal oil revenues from 1.8% of GDP in 2022 to 2.7% by 2025; raise non-oil fiscal revenues from 5.3% to 7.3% in the same period; increase social safety nets to support 67 million vulnerable Nigerians; and dramatically increase the import value of previously prohibited goods from $11.3 million to $54.6 million by 2025.
- Similarly, a $750 million allocation was made for the Accelerating Resource Mobilisation Reforms Program-for-Results (PforR) project, which was also authorized on June 13, 2024. It is still in the signing phase, though, and no money has been released as of yet. The PforR program’s Program Development Objective (PDO) aims to protect and enhance non-oil revenues while concentrating on extensive tax, excise, and administrative reforms from 2024 to 2028 at the federal level.
- Similarly, none of the $750 million allotted for the Nigeria Distributed Access through Renewable Energy Scale-up Project had been disbursed as of December 14, 2023. With an ambitious objective of improving access to electricity for over 17.5 million Nigerians using distributed renewable energy solutions, this initiative is essential for resolving the country’s electricity access deficit.
- Furthermore, just $20 million of the $700 million allotted to the Adolescent Girls Initiative for Learning and Empowerment—approved on September 21, 2023—has been disbursed. This program builds on the “Adolescent Girls Initiative for Learning and Empowerment” (AGILE) project, which aims to improve secondary education accessibility for girls in particular target states in Nigeria.
- The $500 million allotted to the Nigeria for Women Program Scale-Up Project, a significant endeavor aimed at empowering women across the country, has only seen $1.99 million spent. Under President Tinubu’s leadership, this project was approved to scale up funding for the Nigeria for Women Program, which is currently in place.
- The Power Sector Recovery Performance-Based Operation, which was approved by Tinubu’s administration on June 9, 2023, has received only $1.12 million of its $750 million budget. A key element of Nigeria’s larger plan to stabilize and improve its power industry, this loan is earmarked as extra financing for the power sector recovery performance-based operation.
It is significant to remember that many of these loans have conditions attached to them, meaning that before more money is given out, certain requirements must be fulfilled. These requirements are meant to guarantee that the money is used wisely and that the projects are headed toward the goals they were set out to accomplish.
What to note
- The disbursement rate, which is low at only 16%, calls into question how well the current administration can secure and apply foreign funding for national development.
- Furthermore, the general trajectory of economic growth and development that these loans are meant to assist may be impacted by the delay in disbursement.
- Prior to this, The News Chronicles had shown that Nigeria had obtained $4.95 billion in loans under Tinubu from the World Bank in response to worries about the nation’s growing foreign debt payment expenses.
- Additionally, this year, the World Bank might approve four credit projects for Nigeria totaling $2 billion.
- According to information from the Debt Management Office’s (DMO) foreign debt stock report, as of March 31, 2024, Nigeria owed the World Bank a total of $15.59 billion.
