Nigeria is poised to receive a substantial $1.65 billion financial boost from the World Bank in 2025, targeting three crucial development areas: internally displaced persons (IDPs), education, and nutrition. This funding, slated for approval in the first quarter of 2025, reflects the World Bank’s ongoing commitment to supporting Nigeria’s developmental goals and its efforts to address pressing social and economic challenges. The individual projects encompass a $300 million initiative aimed at providing sustainable solutions for IDPs and their host communities, a $553.8 million investment in quality basic education, and a significant $800 million commitment to enhancing nutrition outcomes across the country. These projects are currently under concept review and their final approval hinges on Nigeria’s ability to meet the World Bank’s prerequisites and demonstrate a strong commitment to accountable implementation.
This pending $1.65 billion package is part of a larger trend of World Bank support for Nigeria under President Bola Tinubu’s administration. Since taking office, Tinubu’s government has secured a remarkable $6.95 billion in loans from the World Bank, a figure that includes a recently approved $500 million loan for the Rural Access and Agricultural Marketing Project—Scale Up. This project aims to strengthen the connection between rural communities and wider markets, improving access to essential services like healthcare and education while fostering social cohesion within rural populations. This latest loan marks the tenth World Bank-funded project approved under Tinubu’s leadership, underscoring the administration’s focus on securing international financing for development initiatives.
The World Bank’s lending portfolio in Nigeria during Tinubu’s tenure reflects a diverse range of priorities. A $750 million loan targeted the power sector, aiming to stabilize and improve electricity supply, a critical bottleneck to economic growth. Another $500 million was dedicated to women’s empowerment programs, while $700 million was earmarked for enhancing educational opportunities for adolescent girls. Further investments have been directed towards expanding access to electricity through renewable energy solutions, bolstering economic stability through development policy financing programs, and improving resource mobilization reforms.
The World Bank’s recent support also extends to crucial sectors like healthcare, education, and water management. A $1.57 billion financing package, approved in late 2024, included a $500 million investment aimed at improving governance within the education and health sectors, a $570 million commitment to strengthening primary healthcare services, particularly for vulnerable groups, and another $500 million allocated for sustainable power and irrigation projects designed to mitigate climate-related risks. These investments demonstrate a comprehensive approach to addressing Nigeria’s developmental needs, ranging from immediate social welfare concerns to long-term infrastructure development and climate resilience.
However, this influx of loans raises important questions about Nigeria’s debt burden and its ability to effectively manage and repay these obligations. The World Bank currently holds a significant share of Nigeria’s external debt, totaling $16.32 billion, primarily through the International Development Association (IDA). This represents a substantial portion of Nigeria’s overall external debt, highlighting the country’s reliance on concessional financing. In addition to the principal amounts, Nigeria faces the growing cost of servicing its external debt, which reached $3.58 billion in the first nine months of 2024, a significant increase compared to the previous year. This underscores the increasing pressure on Nigeria’s fiscal resources, making prudent debt management and effective utilization of borrowed funds crucial for sustainable development.
This increasing debt service burden is not unique to Nigeria. Developing countries globally are facing similar challenges, exacerbated by rising interest rates. The World Bank’s International Debt Report highlighted that developing nations spent a record $1.4 trillion on debt servicing in 2023, with interest payments alone surging by nearly 30%. This financial strain disproportionately affects low-income countries, often diverting resources away from essential social and developmental programs. Therefore, while the influx of World Bank funding provides a significant opportunity for Nigeria to address critical development gaps, it also necessitates a careful balancing act between leveraging these resources for impactful projects and ensuring long-term debt sustainability.
