Nigeria secures $4.95 billion World Bank loans in Tinubu’s first year in office 

Under the administration of President Bola Tinubu, Nigeria has secured a total of $4.95 billion in loans from the World Bank. This comes amid concerns over the country’s rising external debt servicing costs. 

According to Nairametrics, not less than six loan projects have been approved, and they include loans for power ($750 million), women empowerment ($500 million), girl’s education ($700 million), renewable energy ($750 million), economic stabilization reforms ($1.5 billion) and resource mobilization reforms ($750 million).

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Summary of loans

• $750 million loan for power sector: The first was approved on June 9, 2023 to boost Nigeria’s power sector. The World Bank said the loan would serve as additional financing for the power sector recovery performance-based operation. 

• ⁠$500 million for women’s empowerment: The World Bank Group announced on June 27, 2023, the approval of a loan of $500 million to help Nigeria drive women’s empowerment. This was the second loan approved by the bank under President Tinubu.

• $700 million for educating adolescent girls: In September 2023, the World Bank approved a loan of $700 million to bolster the country’s educational opportunities and empowerment for adolescent girls in Nigeria.

• $750 million for renewable energy: On December 14, 2023, the World Bank approved $750 million Distributed Access through Renewable Energy Scale-up (DARES) project in Nigeria. The project was to provide Nigerians with better access to electricity via distributed renewable energy solutions.

• $1.5 Billion for Economic Stabilization Reforms: On June 13, 2024, the World Bank approved two major financial operations to strengthen Nigeria’s economic stability and support its vulnerable populations. The combined package, totaling $2.25 billion, includes the $1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF). This project is structured around four key outcomes across two pillars: increasing fiscal oil revenues from 1.8% of GDP in 2022 to 2.7% by 2025, boosting non-oil fiscal revenues from 5.3% to 7.3% over the same period, expanding social safety nets to assist 67 million vulnerable Nigerians, and raising the import value of previously banned products from $11.3 million to $54.6 million by 2025.

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• $750 Million for Resource Mobilization Reforms: The second loan package approved on June 13 is $750 million for the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR). The primary objective of the PforR program is to enhance non-oil revenues and protect oil and gas revenues from 2024 to 2028 at the federal level, with a focus on significant tax, excise, and administrative reforms.

Additional insights

The World Bank revealed that Nigeria was the top recipient of its new loans in 2022, receiving approximately $2.9 billion. According to the International Debt Report for 2023, Nigeria was followed by Tanzania, which received $2.7 billion in the same year.

Also, the Debt Management Office (DMO) stated that Nigeria owed the World Bank a total of $15.45 billion as of December 31, 2023. Nigeria experienced a significant increase in its foreign debt servicing costs, with a 96% rise as external debt service payments reached $2.19 billion in the first five months of 2024, up from $1.12 billion in the same period in 2023.