The Federal Government is currently engaging the World Bank on a fresh $1.5bn loan.
The objective of the loan is “to strengthen systems for improved delivery of basic education and primary health services in participating states.”
The loan is meant to be implemented in 2024 pending approval by the board of the World Bank Group.
According to findings discovered there was another loan titled: ‘Nigeria Macro-Fiscal Reforms for Economic Stability and Economic Transformation’.
There were also pending discussions on five other loan projects, according to findings. These include $300m for solutions for internally displaced persons and host communities’ project, $500m for rural access and agricultural marketing project-scale up, $750m for the Nigeria distributed access through renewable energy scale-up project, $700m for sustainable power and irrigation for Nigeria project, and $500m for NG accelerating resource mobilisation for reforms PforR.
So far, Nigeria has secured a total of $1.95bn in loans from the World Bank in the first four months of President Bola Tinubu’s administration.
The first was the $750m approved on June 9, 2023 to boost Nigeria’s power sector.
The second was $500m to help the country’s drive for women’s empowerment and was approved on June 22, 2023.
The third was a $700m loan to enhance adolescent girls’ learning and empowerment, and was approved on September 21, 2023.
Further breakdown showed that Nigeria has $14.51bn IDA debt and $485.75m IBRD debt by the second quarter of the year.
The Debt Management Office recently said Nigeria’s total public debt hit N87.38tn at the end of the second quarter.
The figure represents an increase of 75.29 per cent or N37.53tn compared to N49.85tn recorded at the end of March 2023.
Further breakdown shows that Nigeria has a total domestic debt of N54.13tn and total external debt of N33.25tn.
While the domestic debt makes up 61.95 per cent of the total debt, the external makes up 38.05 per cent. There has been a significant increase in both domestic and external debts within three months.
Recently, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, while unveiling an eight-point agenda for the economy, said, “The government is not in a position to borrow if you consider 90 per cent debt service to revenue and behind that, a rising debt to GDP ratio. If you look at the last budget, you will see that there is a borrowing requirement built into it and appropriated by the National Assembly. And that is ongoing.”
At the 2023 Annual Business Summit of Capital Market Solicitors Association held in Lagos, the DMO noted that Nigeria had budgetary approval for N1.7tn external debt borrowing.
He stressed that the country needed a thorough review of the current loans and how they had been utilised to ensure economic growth.
He also advised the World Bank and the International Monetary Fund to refrain from lending money to Nigeria until 2025.
