Nigeria’s public debt is poised for another increase as the World Bank gears up to approve a $1.7 billion loan for the country. According to the World Bank’s project list, the loan is scheduled for approval on September 26, 2024, with funds earmarked for healthcare, agriculture, infrastructure improvements, and enhancing economic stability and resource mobilization.
As part of the scheme, the World Bank will provide $500 million for the Nigeria: Primary Healthcare Provision Strengthening Programme, while another $500 million will be directed toward the Nigeria Human Capital Opportunities for Prosperity and Equity (HOPE) – Governance project, which has a total cost of $700 million. Additionally, $500 million will be allocated for the Sustainable Power and Irrigation for Nigeria project, which has an overall cost of $10.75 billion.
Nigeria’s total debt stock surged in the first half of 2023, reaching N121.67 trillion, a significant rise from N97.34 trillion recorded in December 2023, as reported by the Debt Management Office (DMO). The new loan could increase the nation’s debt by another N2.7 trillion, raising concerns over fiscal management.
The loan comes at a time when the Naira has depreciated by over 70% since the 2023 market float, meaning that any external borrowing will become more costly to service and repay in local currency. However, the loan is expected to boost the local supply of foreign exchange, providing a potential cushion for the country’s struggling economy.
