Daud Olatunji
In a financial report released today, it has been revealed that Nigeria is currently servicing an impressive portfolio of World Bank loans valued at $14.12 billion.
This information is based on data retrieved from the official World Bank website.
Diving into the details, it was discovered that these loans are spread across 108 approved projects, spanning several decades of Nigeria’s economic history.
The oldest among them dates back to 1989 during the administration of Gen. Ibrahim Babangida, while the most recent was sanctioned in 2018 under the leadership of former President Muhammadu Buhari.
One of the most historical loans being managed is the Multistate Agricultural Development Project (03), with an initial approval of $100.9 million.
However, records indicate that $106.7 million has been disbursed towards this agricultural initiative, aimed at bolstering food and crop production, as well as increasing the income of small-scale farmers.
Among the loans approved in 2018, there are key projects currently in the “Disbursing & Repaying” phase.
Notably, the $125 million fiscal governance and institutions project, which received approval on June 27, 2018, has seen $40.17 million disbursed as of the latest data.
Another significant project in the same category is the $750 million Fiscal Governance and Institutions Project, also approved in June 2018, with $737.13 million already disbursed.
An additional $750 million was approved on December 14, 2020, under this project, but it is currently undergoing disbursement, with no repayment requirements at this stage.
Furthermore, the report highlights that loans like the $364 million and $122 million approved in 2018 for the Electricity Transmission Project are currently in the repayment phase, while disbursement continues.
Over the years, Nigeria has successfully repaid approximately 68 loans, amounting to around $4.79 billion.
These loans have been provided by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), both components of the World Bank.
The IBRD extends loans to governments of middle-income and creditworthy low-income nations, while the IDA offers concessional loans and grants to the world’s poorest countries.
Nigeria generally begins servicing these loans five years after approval, with repayment periods extending up to over 30 years.
These loans are considered concessional financing, offering below-market-rate finance and more favorable terms for the Nigerian government.
For instance, the $800 million World Bank loan designated for post-petroleum subsidy palliatives for over 50 million Nigerians carries a maximum commitment charge rate of one-half of one percent per annum on the Unwithdrawn Financing Balance and a service charge of three-fourths of one percent per annum on the withdrawn credit balance.
This makes the loans economical to service, ultimately benefiting the nation’s economic development efforts.
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