Public debt set to rise as Nigeria awaits World Bank’s $1.7bn loan

Nigeria’s public debt is set to rise as the World Bank readies a $1.7 billion loan for Nigeria.

According to the World Bank’s project list, the loan will be approved on September 26, 2024.

The loan is targeted at improving Nigeria’s healthcare, agriculture, and infrastructure while driving its economic stability and resource mobilisation capacity.

Under the scheme, the World Bank will approve $500 million for ‘Nigeria: Primary Healthcare Provision Strengthening Programme.’  Another $500 million will be granted to Nigeria for a project tagged, ‘Nigeria Human Capital Opportunities for Prosperity and Equity (HOPE) – Governance,’ with a project cost of $700 million.

Read also: Debt servicing seen eroding govt’s scarce revenue, as total public debt hit N121 trillion

The third project, tagged, ‘ Sustainable Power and Irrigation for Nigeria,’ will also attract another $500 million. It has a project cost of $10.75 billion.

Nigeria’s total debt stock rose in the first quarter (H1) of 2023 to N121.67 trillion, from N97.34 trillion as of December 2023, according to data from the Debt Management Office (DMO).

With this loan, the nation’s total public debt could rise further by N2.7 trillion, putting Nigeria’s fiscal management in the spotlight.

Nigeria’s Naira has faced depreciation of over 70 percent since the 2023 market float and any external debt will cost more in naira to both redeem and service, though it has the capacity to increase local foreign exchange supply.