Nigeria has secured a $500 million loan from the World Bank to fund its Community Action for Resilience and Economic Stimulus Program, a targeted effort to address escalating economic woes and support the nation’s most vulnerable.
Approved on March 28, 2025, the loan aims to provide relief to households and small businesses reeling from inflation, food insecurity, and economic instability, with a focus on grassroots interventions. Yet, as the country’s debt profile balloons and public skepticism grows, the initiative is drawing both cautious optimism and sharp scrutiny from stakeholders who fear the funds may not reach their intended beneficiaries.
The World Bank framed the program as a vital step toward tackling systemic vulnerabilities in Nigeria’s economy. The initiative seeks to alleviate the burden of soaring living costs, strengthen community resilience, and enhance food security while fostering sustainable economic opportunities for those hit hardest by recent disruptions. This loan is part of a broader financial lifeline this week, with two additional packages—an $80 million loan for nutrition outcomes and a $552 million loan for basic education—awaiting final clearance on March 31, 2025.
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These efforts align with the World Bank’s strategy to bolster Nigeria’s development priorities in healthcare, education, and poverty alleviation, with the institution stressing the need for efficient implementation to ensure maximum impact.
However, the loan has once again ignited concern about Nigeria’s growing debt profile. The Central Bank of Nigeria (CBN) underscored the mounting debt context in its Fourth Quarter 2024 Economic Report, released Monday. Nigeria’s external debt reached N66.14 trillion ($43.03 billion) by Q3 2024, a 0.30% uptick from $42.90 billion in Q2 and a 3.40% rise from $41.59 billion in Q3 2023. Servicing this debt drained $1.34 billion by September 2024, split between $0.72 billion in principal repayments (53.73%) and $0.62 billion in interest (46.27%).
Under President Bola Tinubu, Nigeria has clinched approvals for 11 World Bank projects totaling $7.45 billion in under two years. However, DMO data show only $774.99 million—16%—had been disbursed by July 31, 2024. Nigeria’s World Bank debt stands at $17.32 billion, with $16.84 billion owed to the International Development Association (IDA) (39.14% of external debt) and $485.08 million to the International Bank for Reconstruction and Development (IBRD) (1.13%). This slow disbursement, paired with a rising debt stock, has intensified public and expert unease.
Beyond the fiscal strain, a large swath of Nigerians worry the $500 million loan will vanish into private pockets rather than reach its targets. Social media reflects this distrust, with X users questioning accountability. “Another $500 million to line pockets while we starve?” one post read. The sentiment echoes past criticisms of mismanagement, amplifying calls for transparency.
LCCI Weighs In
The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the loan’s potential but demanded rigor. Director-General Dr. Chinyere Almona issued a statement urging the government to ensure the judicious use of the fund.
“The Lagos Chamber of Commerce and Industry (LCCI) acknowledges the recent approval of a $500 million loan by the World Bank to Nigeria under the Community Action for Resilience and Economic Stimulus Program. This development comes at a crucial time as the nation grapples with mounting economic challenges, including inflationary pressures, declining purchasing power, and an increasingly burdensome debt profile. While this intervention is aimed at supporting poor and vulnerable households and firms, it is imperative that its broader implications on businesses and the economy pose a concern to the business community” she said.
Dr. Almona stressed transparency adding that: “The loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presents a potential short-term stimulus. It can enhance food security and community resilience, mitigating the effects of economic hardship at the grassroots level. However, the broader macroeconomic effects must be carefully considered. Nigeria’s rising debt burden is a growing concern, particularly given the slow pace of disbursement and implementation of previously approved loans.”
She called for “a robust monitoring and evaluation framework” to prevent misallocation and urged prioritizing concessional financing for viable projects.
The LCCI also pushed for structural reforms, demanding that Policies focus on improving infrastructure, ensuring policy consistency, and addressing forex challenges to support private sector growth and attract investment.
Against the backdrop of the World Bank’s share of Nigeria’s external debt reaching $17.32 billion, Dr. Almona warned that the question of debt sustainability has become increasingly pressing.
According to her, if not efficiently managed, additional borrowing could exacerbate fiscal vulnerabilities, weaken investor confidence, and limit the government’s ability to execute long-term economic reforms.
She highlighted persistent issues—poor power supply, high energy costs, and forex volatility—urging diversification to reduce debt reliance.