Nigeria has received only about 16% of the total loan approved by the World Bank under the administration of President Bola Tinubu.
According to an analysis of disbursement data from the website of the World Bank, the loans, which were approved for various projects aimed at economic stabilization, infrastructure development, and social welfare, amount to $4.95 billion.
However, as of July 31, 2024, only $774.99 million has been disbursed, raising concerns about the pace of project implementation and fund utilization.
Overview of approved loans
The World Bank has approved a series of loans to Nigeria, strategically targeting critical sectors such as economic reforms, resource mobilization, adolescent girls’ education, and renewable energy expansion.
Despite these approvals, the data reveals a significant gap between the approved funds and the actual disbursements, underscoring challenges in project execution and fund allocation.
In total, these loans amount to $4.95 billion, with a substantial $4.16 billion still awaiting disbursement.
- Among the most prominent of these initiatives is the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing (DPF) project. With an allocation of $1.5 billion, this project is in the disbursing phase, yet only about $751.88 million has been released to Nigeria since its approval on June 13, 2024.
- The RESET DPF is structured around four pivotal outcomes: elevating fiscal oil revenues from 1.8% of GDP in 2022 to 2.7% by 2025, increasing non-oil fiscal revenues from 5.3% to 7.3% within the same timeframe, expanding social safety nets to assist 67 million vulnerable Nigerians, and significantly boosting the import value of previously banned products from $11.3 million to $54.6 million by 2025.
- Similarly, the Accelerating Resource Mobilization Reforms Program-for-Results (PforR) project, also approved on June 13, 2024, has a $750 million allocation. However, it remains in the signed phase, with no funds yet disbursed. The Program Development Objective (PDO) of the PforR program is to strengthen non-oil revenues and safeguard oil and gas revenues from 2024 to 2028 at the federal level, focusing on comprehensive tax, excise, and administrative reforms.
- The Nigeria Distributed Access through Renewable Energy Scale-up Project, approved on December 14, 2023, has similarly seen no disbursement from its $750 million allocation. This project is vital for addressing Nigeria’s electricity access deficit, with an ambitious goal to provide over 17.5 million Nigerians with improved access to electricity through distributed renewable energy solutions.
- Moreover, the Adolescent Girls Initiative for Learning and Empowerment, approved on September 21, 2023, has received only $20 million of its $700 million allocation. This initiative is designed to bolster secondary education accessibility for girls in specific target states across Nigeria, continuing the efforts of the ongoing ‘Adolescent Girls Initiative for Learning and Empowerment’ (AGILE) project.
- The Nigeria for Women Program Scale-Up Project, a key initiative aimed at empowering women nationwide, has seen a mere $1.99 million disbursed from its $500 million allocation. This project, approved under President Tinubu’s administration, provides scale-up financing for the already established Nigeria for Women Program.
- The first project approved under Tinubu’s administration, the Power Sector Recovery Performance-Based Operation, secured on June 9, 2023, has only received $1.12 million of its $750 million allocation. This loan is designated as additional financing for the power sector recovery performance-based operation, a crucial component of Nigeria’s broader strategy to stabilize and enhance its power sector.
It is important to note that a number of these loans are conditional, requiring specific criteria to be met before additional funds can be disbursed. These conditions are designed to ensure that the funds are used effectively and that the projects are on track to achieve their intended outcomes.
What you should know
- The low disbursement rate of just 16% raises critical questions about the effectiveness of the current administration in securing and utilizing international funds for national development.
- Moreover, the delay in disbursement could impact the overall economic growth and development trajectory that these loans are intended to support.
- Nairametrics earlier reported that Nigeria secured a total of $4.95 billion in loans from the World Bank under Tinubu amid concerns over the country’s rising external debt servicing costs.
- Also, the World Bank may approve four loan projects totalling $2 billion for Nigeria this year.
- Data from the external debt stock report of the Debt Management Office (DMO) shows that Nigeria owes the World Bank a total of $15.59 billion as of March 31, 2024.