The Lagos Chamber of Commerce and Industry (LCCI) a $500 million intervention loan from the World Bank to Nigeria government under the Community Action for Resilience and Economic Stimulus Program can enhance food security and community resilience, mitigating the effects of economic hardship at the grassroots level.
The Director General of LCCI, Dr. Chinyere Almona said while the intervention is aimed at supporting poor and vulnerable households and firms, it is imperative that its broader implications on businesses and the economy pose a concern to the business community.
Reacting on the $500 million World Bank Loan & Nigeria’s Economic Future, she said the loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presents a potential short-term stimulus.
She said with the World Bank’s share of Nigeria’s external debt reaching $17.32 billion, the question of debt sustainability becomes increasingly pressing, warning that if the loan is not efficiently managed, additional borrowing could exacerbate fiscal vulnerabilities, weaken investor confidence, and limit the government’s ability to execute long-term economic reforms.
From a business perspective, she said while targeted stimulus programs can offer temporary relief, structural economic challenges such as inadequate infrastructure, multiple taxation, and forex volatility remain unaddressed.
She said businesses require a stable operating environment, and while social welfare programs are essential, they must be complemented by policies that foster productivity, investment, and job creation.
Expressing concern about the efficiency of fund allocation and utilization, she said that only 16 per cent of previously approved World Bank loans under the current administration have been disbursed.
This, according to her, raises questions about the absorptive capacity of relevant institutions and the risk of funds being underutilised or mismanaged.
To maximise the benefits of this loan while mitigating associated risks, the LCCI recommends that there must be a transparent and efficient disbursement mechanism that ensures funds reach the intended beneficiaries, particularly small businesses and vulnerable communities.
She said a robust monitoring and evaluation framework should be established to track the impact of these funds and prevent misallocation.
The LCCI Director General said “government should adopt a prudent debt management strategy that prioritizes concessional financing and ensures that borrowed funds are tied to projects with clear economic returns, strengthening domestic revenue generation through tax reforms and expanding the productive base of the economy can reduce reliance on external borrowing.”
Beyond short-term palliatives, she said the government must implement structural reforms that create a conducive business environment and policies should focus on improving infrastructure, ensuring policy consistency, and addressing forex challenges to support private sector growth and attract investment.
She said while the World Bank loan offers immediate relief, long-term economic resilience can only be achieved through a comprehensive strategy that fosters economic diversification, enhances productivity, and strengthens institutional frameworks for effective governance.