The World Bank has approved three significant projects for Nigeria, providing a total of $1.57 billion in financing. This latest funding, announced in a statement by World Bank Nigeria on Monday, September 26, 2024, is aimed at addressing challenges in education, healthcare, and climate resilience while enhancing critical infrastructure for irrigation and dam safety.
The package includes a $1.5 billion loan and a $70 million grant and is part of the World Bank’s broader strategy to improve key sectors in Nigeria, including human capital development, governance, and water management. The move highlights the bank’s ongoing commitment to help Nigeria navigate its social and environmental challenges while driving improvements in productivity and reducing poverty.
Project Breakdown
The $1.57 billion will be allocated across three major initiatives, each targeting critical areas of Nigeria’s development:
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HOPE-GOV Program: $500 Million for Governance in Health and Education
This program will receive $500 million to address governance challenges in the education and healthcare sectors. By improving financial and human resource management systems, the program aims to enhance transparency and accountability in these sectors, ensuring that essential services reach vulnerable populations.
Poor governance has long plagued Nigeria’s education and health services, where resource mismanagement and corruption have hindered service delivery. The HOPE-GOV program is designed to address these issues head-on by reforming management structures and making services more accessible, particularly to low-income families who have been historically marginalized.
HOPE-PHC Program: $570 Million for Primary Healthcare Strengthening
The Primary Healthcare Provision Strengthening Program (HOPE-PHC) is set to receive $570 million to revamp Nigeria’s primary healthcare services, focusing on improving outcomes for women, children, and adolescents. With Nigeria grappling with some of the highest maternal and under-five mortality rates in the world, the program will provide much-needed support in reproductive, maternal, newborn, child, and adolescent health services.
A combination of $500 million in International Development Association (IDA) credit and a $70 million grant from the Global Financing Facility (GFF) will fund the program. Contributions from organizations like the UK Foreign, Commonwealth & Development Office (FCDO) and the Children’s Investment Foundation Fund (CIFF) will help finance sustainable healthcare initiatives, particularly in underserved areas where quality health services are often inaccessible.
The World Bank estimates that this project will benefit over 40 million Nigerians, helping to reduce mortality rates and improve the overall resilience of the healthcare system.
SPIN Program: $500 Million for Sustainable Power and Irrigation
The third major project, known as the Sustainable Power and Irrigation for Nigeria (SPIN) program, will receive $500 million to enhance Nigeria’s climate resilience through improved dam safety and irrigation infrastructure. This initiative aims to protect Nigeria from climate-induced disasters, such as floods and droughts, which have negatively impacted agriculture and rural livelihoods in recent years.
The project will also expand Nigeria’s irrigation systems, benefiting farmers and livestock breeders across the country. With around 950,000 people expected to benefit directly, the SPIN project will not only boost agricultural productivity but also support Nigeria’s long-term energy strategy by developing a hydropower generation master plan. This plan will facilitate the public-private partnerships needed to increase energy production and enhance national energy security.
Tackling Nigeria’s Governance and Human Capital Challenges
In the announcement, Dr. Ndiamé Diop, the World Bank’s Country Director for Nigeria, underscored the importance of investing in Nigeria’s human capital, emphasizing the need to address governance weaknesses in critical sectors such as healthcare and education.
“Effective investment in the health and education of Nigerians today is central to increasing their future employment opportunities, productivity, and earnings, while reducing poverty among the most vulnerable,” Diop said.
He highlighted the need to improve access to high-quality services for women and girls, who face the greatest barriers to healthcare and education in Nigeria.
The SPIN program, Diop added, will play a crucial role in protecting Nigerians from the effects of climate change while boosting hydropower generation, contributing to the nation’s long-term sustainability.
Concerns Over Debt and Project Implementation
While this financing marks a critical step in addressing Nigeria’s developmental challenges, it also raises concerns about the country’s rising external debt. Under the administration of President Bola Tinubu, Nigeria has secured a total of $6.52 billion in new financing from the World Bank. However, there are concerns about how effectively these funds are being utilized, as Nigeria continues to struggle with external debt servicing.
As of July 31, 2024, Nigeria had received only 16% of the loans earlier approved by the World Bank under Tinubu’s administration. Out of the $4.95 billion initially approved, just $774.99 million had been disbursed.
Additionally, data from Nigeria’s Debt Management Office (DMO) shows that the country owed the World Bank $15.59 billion as of March 31, 2024. This growing debt burden has led to increased scrutiny over the government’s borrowing practices, with critics warning that the high cost of debt servicing could undermine Nigeria’s long-term economic stability.
Debt service costs gulped a staggering 74% of the federal government’s retained revenue in the first quarter of the year, according to data from the Central Bank of Nigeria.
This situation has created concern over every government’s attempt to borrow, especially as oil production, Nigeria’s major source of revenue, has been in decline. Critics have noted that the government has been borrowing for consumption for about a decade now – creating a debt crisis that will likely jeopardize the economy in the future.
Against this backdrop, the World Bank has been urged to prioritize effective implementation to ensure that the benefits of this funding reach the intended populations.