World Bank to Approve $1.65bn Loans for Nigeria in 2025

The World Bank is preparing to approve three major loan projects for Nigeria in 2025, with a total value of $1.65 billion. The funds are targeted at addressing critical developmental challenges, particularly in the areas of displacement, education, and nutrition.

According to details on the World Bank’s website, the projects are part of broader efforts to bolster Nigeria’s social and economic recovery, with priority given to vulnerable communities and sectors in urgent need of intervention. The first initiative, Solutions for the Internally Displaced and Host Communities Project, will provide $300 million to support sustainable solutions for displaced persons and their host communities. Approval for this project is set for April 8, 2025.

The second project, HOPE for Quality Basic Education for All, is slated for approval on March 20, 2025, and will receive $553.8 million. It aims to improve access to quality basic education. Meanwhile, the Accelerating Nutrition Results in Nigeria 2.0 project will receive the largest share of the proposed loans, at $800 million. The World Bank will hold a decision meeting on February 20, 2025, for the program, which focuses on enhancing nutrition outcomes in the country.

This financing signals the World Bank’s continued support for Nigeria’s reform efforts under President Bola Tinubu. Since taking office, the Tinubu administration has secured approximately $6.95 billion in loans from the World Bank over an 18-month period. The latest addition includes a $500 million loan approved on December 13, 2024, for the Rural Access and Agricultural Marketing Project—Scale Up. This project aims to bridge gaps between rural communities and markets, improve access to schools and hospitals, and foster rural development.

The World Bank’s involvement under the current administration has included several major projects. These include the $750 million Power Sector Recovery Performance-Based Operation, approved in June 2023 to stabilize the power sector; $500 million for the Nigeria for Women Program to drive women’s empowerment; and $700 million for the Adolescent Girls Initiative for Learning and Empowerment, aimed at improving education for adolescent girls.

Additional projects include the $750 million Distributed Access through Renewable Energy Scale-Up Project, which seeks to expand electricity access through renewable energy solutions, and a $2.25 billion package approved in June 2024 for economic stabilization and resource mobilization reforms.

In September 2024, the World Bank approved another $1.57 billion financing package to enhance governance in education and health, strengthen primary healthcare systems, and address climate-related challenges through improved power and irrigation infrastructure.

Nigeria’s growing reliance on external loans underscores its fiscal pressures amid significant economic challenges. According to the Debt Management Office, the World Bank currently holds $16.32 billion of Nigeria’s external debt, representing 38% of the country’s total foreign debt. The International Development Association, a key arm of the World Bank, accounts for the majority of this amount, while the International Bank for Reconstruction and Development is owed $484 million.

The rising cost of external debt servicing further reflects the country’s fiscal strain. Data from the Central Bank of Nigeria shows that the Federal Government spent $3.58 billion on foreign debt servicing in the first nine months of 2024, marking a 39.77% increase compared to $2.56 billion during the same period in 2023.

On a global scale, the World Bank’s latest International Debt Report highlights a surge in debt-servicing costs for developing nations, which spent a record $1.4 trillion in 2023. Interest payments alone accounted for $406 billion, a nearly 30% increase over the previous year, placing immense pressure on vulnerable economies. These rising costs have increasingly limited investments in critical sectors such as health, education, and environmental sustainability.