During the first four months of President Bola Tinubu’s administration, Nigeria obtained a total of $1.95 billion in loans from the World Bank. This development has raised concerns about the country’s growing debt burden.
These loans are designated for specific purposes: $700 million for education, $750 million for power projects, and $500 million for women’s empowerment.
Many Nigerians are growing increasingly bitter when they hear about the government’s plans to borrow money. This bitterness stems from years of deteriorating infrastructure and rising unemployment. While some acknowledge the country’s limited resources, particularly considering its large population, they believe that previous borrowing has not been justified.
“I can’t really fathom what the government uses the money it borrows to do,” said Emeka Nwani, a young Nigerian in his 30s. “If it was judiciously utilised, why does the economy groan under epileptic electricity supply, with most Nigerians struggling to access constant power supply while industries run on generators, paying hugely for alternative energy supply?”
Femi Adelana, a business analyst with Sofidam Capital, can’t fathom why a 2022 UNESCO report noted that about 20 million Nigerians were not enrolled in school despite budget allocations and loans from foreign financial institutions.
“There are lots of frightening tales in the minds of Nigerians whenever the government announces its intention to borrow more,” Adelana said.
Economists said it is not wrong for countries to borrow, as long as the loans would be targeted at specific infrastructure that would, in turn, make life better for the people.
“Increased borrowings can only make lives better when such borrowings are channelled into things that yield economic returns,” said a senior analyst in one of Big Four consulting firms. “But that has never been the case for Nigeria.”
Data from the Debt Management Office showed the federal government had an outstanding external debt of $38.8 billion as of June 2023.
This shows Nigeria has secured three major loans from the World Bank since President Tinubu assumed office on May 29, 2023, totalling $1.95 billion.
$750 million loan for power projects
“Lack of access to the electricity grid affects 45 percent of the population (90 million people), making Nigeria the country with the largest number of people not connected to electricity. As such, Nigeria accounts for 12 percent of the global access deficit,” it said.
$500 million for women empowerment
On June 27, the World Bank Group announced the approval of a loan of $500 million to help Nigeria drive women empowerment.
This became the second loan approved by the World Bank under the President Tinubu administration.
It is a scale-up financing for Nigeria for Women Programme, which was initially approved on June 27, 2018, with $100 million financing.
“The World Bank has approved $500m for Nigeria for Women Program Scale Up. The scale-up financing will further support the government of Nigeria to invest in improving the livelihoods of women in Nigeria,” the World Bank said in a statement.