Nigeria secured total loans of $2.7 billion from the World Bank under the administration of President Bola Tinubu amid concerns over the country’s rising external debt servicing costs.
The four approved loans are for power ($750m), women empowerment ($500m), girl’s education ($700m), and renewable energy ($750m), according to findings by Nairametrics.
While the $750 million loan for the power sector was approved on June 9, 2023 to boost Nigeria’s power sector, another $500 million for women’s empowerment was approved on June 27 to help drive women’s empowerment.
In September 2023, the World Bank approved a loan of $700 million to bolster educational opportunities and empowerment for adolescent girls in Nigeria. The fourth was a $750 million for renewable energy approved on December 14.
The project aims to provide over 17.5 million Nigerians with better access to electricity via distributed renewable energy solutions and tackle the electricity access deficit.
The World Bank recently disclosed that Nigeria was the top recipient of its fresh loans in 2022, with about $2.9 billion released to the country.
According to its International Debt Report for 2023, Nigeria was followed by Tanzania, which got $2.7 billion in the same year.
The report read: “Nigeria and Tanzania were the top recipients of new financing from the World Bank in 2022, at US$2.9 billion and US$2.7 billion, respectively.”
So far, the World Bank has approved to Nigeria in 2023 the total loan received by Tanzania in 2022.
Data from the external debt stock report of the Debt Management Office (DMO) shows that Nigeria owes the World Bank a total of $14.58 billion as of September 30, 2023.
Meanwhile, there have been concerns over the country’s rising debt costs amid rising debt over the years.
Nigeria spent about 277.64 per cent more servicing its external debt in the third quarter of 2023.
The DMO in a statement said that external debt decreased due to the redemption of a $500 million Eurobond and payment of $413.859 million as the first principal repayment of the $3.4 billion loan obtained from the International Monetary Fund (IMF) in 2020 during Covid-19.
However, it appears that there is no record of the debt service to the IMF in the external debt servicing report of the third quarter of 2023.
According to World Bank’s Chief Economist and Senior Vice President, Indermit Gill, record debt levels and high-interest rates have set many countries on a path to crisis.
“The situation warrants quick and coordinated action by debtor governments, private and official creditors, and multilateral financial institutions, more transparency, better debt sustainability tools, and swifter restructuring arrangements. The alternative is another lost decade.’’
