The Federal Government will begin repaying a $500m concessional loan obtained from the International Development Association, a financing arm of the World Bank, from 2029 to 2054.
The loan, secured under the Nigeria Primary Healthcare Provision Strengthening Programme (HOPE-PHC), aims to enhance the country’s primary healthcare system, focusing on maternal and child health, emergency medical services, and pandemic preparedness.
According to details of the financing agreement, the Federal Ministry of Health and Social Welfare will manage the funds in collaboration with key agencies, including the National Primary Healthcare Development Agency, the National Health Insurance Authority, and the Nigeria Centre for Disease Control and Prevention. State governments will also participate through their respective health ministries and primary healthcare boards.
Documents available indicate that the loan will be repaid in biannual instalments, with payments due every April 15 and October 15.
Between 2029 and 2049, Nigeria will repay the principal at an annual rate of 1.65 per cent, increasing to 3.40 per cent from 2049 to 2054.
Additionally, the loan carries a 0.5 per cent commitment charge on unwithdrawn funds and a 0.75 per cent service charge on withdrawn balances.
However, the total repayment cost may fluctuate due to currency conversion adjustments.
Disbursement of the funds will be tied to specific performance indicators to ensure accountability and impact.
These benchmarks include expanding access to primary healthcare, improving emergency obstetric and neonatal care, ensuring a steady supply of essential medicines, and strengthening Nigeria’s pandemic preparedness framework.
A portion of the loan will also be directed towards developing digital health infrastructure, bolstering climate resilience in the health sector, and increasing the enrollment of vulnerable populations in health insurance schemes.
Despite the concessional terms, concerns persist over Nigeria’s mounting external debt burden.
The depreciation of the naira raises the possibility that the real cost of loan repayment in local currency could escalate over the 25-year period.
The loan was approved on September 26, 2024, and is expected to become operational in the 2025 fiscal year, with a closing date of June 30, 2029.
This means the programme will run for approximately four years before repayment begins.
Meanwhile, the World Bank is set to approve an additional $1.13bn in loans for Nigeria before March 2025 as part of efforts to support economic resilience, health security, and education reforms.
Among the projects in the negotiation phase is the Accelerating Nutrition Results in Nigeria 2.0 programme, valued at $80m, aimed at improving nutrition outcomes and reducing malnutrition rates, particularly among vulnerable populations.
Another key initiative, the Community Action for Resilience and Economic Stimulus Programme, worth $500m, is expected to be approved by March 24, 2025.
This programme is designed to provide economic stimulus for community-driven projects to enhance resilience and growth.
Additionally, the HOPE for Quality Basic Education for All programme, valued at $552.2m, is in negotiation and is expected to receive approval by March 31, 2025.
This project seeks to improve educational infrastructure, enhance teacher training, and expand access to quality basic education across the country.
The approval of these loans comes amid rising debt servicing obligations.
Data from the Central Bank of Nigeria shows that the country spent $5.47bn on external debt servicing between January 2024 and February 2025, further straining foreign reserves and fiscal stability.
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