The World Bank’s lending practices in Nigeria have come under scrutiny, particularly concerning the disbursement of approved loans. While reports indicate the bank approved a substantial $8.40 billion in loans for Nigeria between June 2023 and August 2025, covering 15 projects across diverse sectors, questions have arisen regarding the timely release of these funds. Specifically, six loans totaling $2 billion, approved and signed between September and December 2024, remain undisbursed nearly a year later. This delay raises concerns about project implementation timelines and the effectiveness of the intended development initiatives. The World Bank has clarified its disbursement procedures, emphasizing a phased approach based on project milestones and specific financing instruments. This explanation sheds light on the complexities of international development funding and the mechanisms employed to ensure responsible and effective utilization of resources.
The World Bank’s funding for Nigeria is channeled through two primary instruments: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD, catering to middle-income and creditworthy low-income countries, provides loans with commercial or near-commercial terms. The IDA, on the other hand, offers highly concessional loans and grants to the world’s poorest nations. This dual approach allows the bank to tailor its financial assistance to the specific economic circumstances of recipient countries, ensuring appropriate levels of support and debt sustainability. In Nigeria’s case, the approved $8.40 billion includes $1.95 billion from the IBRD and $6.50 billion from the IDA, reflecting the country’s classification as a lower-middle-income nation.
The six undisbursed loans, amounting to $2 billion, represent a significant portion of the total approved funding for 2024. These loans encompass critical development areas, including power and irrigation, human capital development, and rural infrastructure. The Sustainable Power and Irrigation Project, backed by a $500 million loan, aims to address the interconnected challenges of water, food, and energy security through investments in irrigation systems, dam safety, and hydropower planning. The Nigeria Human Capital Opportunities for Prosperity and Equity (HOPE) project, also receiving $500 million, focuses on strengthening governance and improving the delivery of primary healthcare and basic education services. The Rural Access and Agricultural Marketing Project, with a combined $357 million, $86 million, and $57 million in loans, seeks to enhance agricultural productivity and market access in rural areas.
The delay in disbursement of these crucial development funds stems from the World Bank’s established procedures, which require the fulfillment of specific conditions prior to the release of funds. These conditions, agreed upon between the World Bank and the Nigerian government, ensure project readiness and alignment with the bank’s development objectives. Mansir Nasir, Senior External Affairs Officer at the World Bank, explained that disbursements are not made as a lump sum but rather in installments, tied to the achievement of predefined milestones. This phased approach allows for continuous monitoring and evaluation of project progress, ensuring effective implementation and maximizing the impact of the investment. The disbursement timelines and corresponding amounts are publicly available on the World Bank’s loan portal, providing transparency and accountability in the utilization of funds.
The three loans signed in September 2024, each amounting to $500 million, target vital sectors crucial for Nigeria’s sustainable development. The Sustainable Power and Irrigation Project is expected to improve water resource management, enhance agricultural productivity through improved irrigation, and contribute to increased energy generation through hydropower. The HOPE-Governance project focuses on strengthening institutional capacity, improving public financial management, and enhancing human resource management within the Nigerian government. This project lays the groundwork for effective implementation of the related HOPE-Primary Healthcare and HOPE-Basic Education projects, which aim to improve the quality and accessibility of essential social services. The Primary Healthcare Provision Strengthening Programme, another component of the HOPE initiative, seeks to bolster primary healthcare services, improving health outcomes and reducing preventable diseases.
The three loans signed in December 2024, totaling $500 million and allocated to the Rural Access and Agricultural Marketing Project, address the challenges faced by rural communities in accessing markets and maximizing agricultural productivity. This integrated project aims to improve rural roads and transportation networks, enhance agricultural marketing infrastructure, and strengthen the capacity of farmers and agricultural businesses. By facilitating better access to markets, the project aims to increase incomes for rural households, promote economic growth in agricultural communities, and contribute to food security in Nigeria. The diverse portfolio of these six loans reflects the World Bank’s commitment to supporting Nigeria’s development agenda across multiple sectors, encompassing infrastructure, human capital development, and rural economic empowerment. However, the timely disbursement of these funds remains crucial for the realization of the intended development outcomes and the overall effectiveness of these critical projects.
