World Bank may approve $500m loan to Nigeria today

The Board of the World Bank Group is expected to meet and decide on approving a $500m loan to Nigeria today (Friday) to boost rural access and agricultural marketing in the country, The PUNCH reports.

According to information obtained from the Washington-based institution on Thursday, the loan is for the Rural Access and Agricultural Marketing Project—Scale Up.

It is designed to bridge the gap between rural communities and the broader marketplace, facilitating smoother access to agricultural markets, schools, and hospitals and promoting social cohesion among rural populations.

The World Bank is expected to approve the loan project worth $500m by Friday, December 13, 2024.

The PUNCH earlier reported that the Federal Government was negotiating with the World Bank for the loan.

According to a document on the loan seen by our correspondent, states willing to participate in the project are required to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provisions for administrative costs in the state budget.

The document noted, “While the eligibility for state participation under RAAMP required the drafting and placement of Road Fund and Roads Agency bills in the State house of assemblies, the new project would require the states to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provision for administrative costs made in the state budget. In addition, RARAs offer an opportunity to foster women’s representation in the transport sector.

“The RAAMP-SU’s funds will be allocated on a competitive basis between states factoring in: (a) a refined socioeconomic selection matrix to increase rural access to basic services and promote food security; (b) activities readiness in terms of design; and (c) state’s demonstrated commitment in the projected infrastructure efficient maintenance, including potential co-financing from their own resources.”

The document also noted that the implementation of resettlement and compensation plans is a prerequisite for project activities that cause resettlement.

If approved, this will be the 10th loan project from the World Bank under the administration of President Bola Tinubu.

The Federal Government, under the leadership of President Bola Tinubu, has secured loans worth $6.45bn from the World Bank in 16 months so far.

The amount increased to the new figure following the recent approval of three new loans totalling $1.57bn from the World Bank for various projects in Nigeria and is expected to increase further in the coming months.

The PUNCH further learnt that the international lender approved no fewer than 36 loan requests to the Federal Government, amounting to a substantial total of $24.088bn within five years.

These approvals, aimed at financing various development projects nationwide, arrive alongside increasing concerns about the country’s escalating debt profile, prompting questions about the sustainability of these financial commitments and their potential long-term effects on the economy.

Some of the projects under Tinubu include loans for power ($750m), women empowerment ($500m), girl’s education ($700m), renewable energy ($750m), economic stabilization reforms ($1.5bn) and resource mobilization reforms ($750m).