Tinubu Administration Seeks $4.4 Billion in New Loans Amid Rising Debt Concerns
President Bola Ahmed Tinubu’s government is seeking approval for new loans totaling $4.4 billion from international lenders, including the African Development Bank (AfDB), over the next year. This move comes amid growing worries about the rising costs of servicing Nigeria’s external debt.
Over the past year, Nigeria has borrowed $4.95 billion from the World Bank, pushing the total public debt to N101 trillion. As of December 2023, the nation’s public debt stood at approximately N97 trillion, according to the Debt Management Office.
An analysis by The PUNCH revealed that the World Bank has approved funding for six projects, including $750 million for power sector financing, $500 million for women’s empowerment, $700 million for girl child education, $750 million for renewable energy solutions, $750 million for resource mobilization reforms, and $1.5 billion for economic stabilization reforms.
On June 9, 2023, the World Bank approved a $750 million loan to enhance Nigeria’s power sector, serving as additional financing for the power sector recovery performance-based operation. Later, on June 27, 2023, the bank approved a $500 million loan to support women’s empowerment in Nigeria, marking the second loan under the current administration for scaling up the Nigeria for Women Programme.
In September 2023, the World Bank approved a $700 million loan to support the Adolescent Girls Initiative for Learning and Empowerment project, aimed at improving educational opportunities for adolescent girls in specific Nigerian states.
On December 14, 2023, a $750 million loan was approved for the Distributed Access through Renewable Energy Scale-up project, intended to provide better access to electricity for over 17.5 million Nigerians through renewable energy solutions.
The most recent approval includes a $2.25 billion package: $1.5 billion for the Economic Stabilisation to Enable Transformation Development Policy Financing Programme to increase fiscal oil revenues and expand social safety nets, and $750 million to enhance non-oil revenues and protect oil and gas revenue.
Looking ahead, the Nigerian government is pursuing additional loans, including $500 million for rural road infrastructure and agricultural marketing, $750 million if certain fiscal measures are reinstated, $500 million to address challenges faced by Internally Displaced Persons, and $2.7 billion from the AfDB for economic and budget support.
AfDB President Akinwumi Adesina mentioned in a March interview that the board approved $134 million for an emergency food production plan and is discussing a $1.7 billion economic and budget support loan and a $1 billion agro-industrial process launch across 28 states.
Despite the potential benefits, many Nigerians remain skeptical about the government’s borrowing plans due to long-standing infrastructure issues and high unemployment rates. The World Bank has been a major lender to Nigeria, with the country’s debt to the institution standing at $15.45 billion as of December 31, 2023.
President Tinubu has pledged to reduce reliance on borrowing for public spending, yet the administration continues to seek credit from domestic and international sources. The increasing costs of servicing foreign debt pose significant economic challenges, potentially diverting resources from critical sectors such as healthcare, education, and infrastructure, thereby exacerbating socio-economic issues.