World Bank Set to Approve $500m Loan for Nigeria Today

Nigeria may secure a $500 million loan from the World Bank today, aimed at supporting economic reforms and boosting development initiatives across key sectors.

The World Bank Group’s Board is anticipated to convene today (Friday) to decide on the approval of a $500 million loan for Nigeria, aimed at enhancing rural access and agricultural marketing in the country.

According to details acquired from the Washington-based institution on Thursday, the loan is intended for the Rural Access and Agricultural Marketing Project—Scale Up.

It aims to connect rural communities with the larger marketplace, enabling easier access to agricultural markets, schools, and hospitals while fostering social cohesion among rural populations.

The World Bank is anticipated to approve the $500 million loan project by Friday, December 13, 2024.

It was earlier reported that the Federal Government was in negotiations with the World Bank regarding a loan.

A document on the loan, reviewed by our correspondent, indicates that states interested in joining the project must have an operational Roads Fund and Roads Agency, complete with appointed boards and staff. Additionally, they need to allocate provisions for administrative costs within their state budget.

The document indicated that, whereas eligibility for state participation under RAAMP necessitated the drafting and introduction of Road Fund and Roads Agency bills in State legislative assemblies, the new project mandates states to establish fully operational Roads Funds and Agencies. This includes appointing boards and staff members along with allocating administrative costs within the state budget. Moreover, RARAs present an opportunity to enhance women’s representation in the transport sector.

The allocation of RAAMP-SU funds among states will be based on a competitive process that considers: (a) an enhanced socioeconomic selection matrix aimed at improving rural access to basic services and boosting food security; (b) the readiness of activities in terms of design; and (c) the state’s demonstrated commitment to efficiently maintaining projected infrastructure, including potential co-financing from their own resources.

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The document also highlighted that executing resettlement and compensation plans is a prerequisite for initiating project activities that lead to displacement.

If this is approved, it will become the 10th loan project from the World Bank during President Bola Tinubu’s administration.

Under the leadership of President Bola Tinubu, the Federal Government has obtained loans totaling $6.45 billion from the World Bank over a span of 16 months.

The figure rose after the recent approval of three new loans from the World Bank, totaling $1.57 billion for various projects in Nigeria, and is anticipated to rise even more in the upcoming months.

Additionally, it was discovered that the international lender approved at least 36 loan requests from the Federal Government, totaling a significant $24.088 billion over a span of five years.

These approvals, intended to fund various development projects across the nation, come amid growing worries about the country’s rising debt profile. This raises questions regarding the sustainability of these financial commitments and their possible long-term impact on the economy.

Some of the initiatives led by Tinubu encompass a $750 million loan for power infrastructure, a $500 million investment in women’s empowerment programs, and $700 million dedicated to girls’ education. Additionally, there are projects focusing on renewable energy with funds amounting to $750 million, economic stabilization reforms totaling $1.5 billion, and resource mobilization reforms supported by another allocation of $750 million.