Tinubu Secures $500M Loan from World Bank as Nigeria Faces Debt Burden to Multiple Countries and Institutions

On June 26, 2023, the World Bank announced its approval of a new loan of $500 million for Nigeria. The loan aims to enhance the livelihoods of women in the country, as stated in the global bank’s official statement.

This $500 million loan marks the second approval by the World Bank under the administration of President Bola Ahmed Tinubu. It will contribute to scaling up financing for the Nigeria for Women Program (NFWP), which initially received $100 million in funding on June 27, 2018.

According to the World Bank, the NFWP-SU financing will support the Nigerian government in improving economic opportunities for women, addressing gender inequality, and promoting better education, health, and nutrition outcomes for families. Additionally, it aims to strengthen women’s and communities’ resilience to climate change.

It is important to note that Nigeria’s total foreign debt stood at $42.67 billion as of March 31, 2023, according to the Debt Management Office. The external debt breakdown consists of $5.16 billion owed to countries as bilateral loans, $20.65 billion as multilateral debt from institutions like the World Bank and IMF, and $15.61 billion as commercial loans, including Eurobonds and Diaspora bond debt. Furthermore, there are additional loans from institutions such as AFC (amounting to $300 million) and promissory notes totaling $931.26 million.

Here is a breakdown of the loans owed to specific countries and institutions as of March 2023:

Loans owed to countries:

  • China (Exim Bank of China): $4.34 billion
  • France (Agence Francaise Development): $593.75 million
  • Japan (Japan International Cooperation Agency): $62.02 million
  • India (Exim Bank of India): $26.64 million
  • Germany (Kreditanstalt Fur Wiederaufbau): $144.75 million

Loans owed to institutions:

  • World Bank Group:
  • International Development Association: $13.84 billion
  • International Bank for Reconstruction and Development: $488.35 million
  • African Development Bank Group:
  • African Development Bank: $1.57 billion
  • Africa Growing Together Fund: $19.97 million
  • African Development Fund: $972.55 million
  • Other international financial institutions:
  • International Monetary Fund: $3.30 billion
  • Arab Bank for Economic Development in Africa: $5.34 million
  • European Development Fund: $37.74 million
  • Islamic Development Bank: $144.12 million
  • International Fund for Agricultural Development: $272.30 million

Additionally, Nigeria’s public debt increased to N82 trillion following the Central Bank of Nigeria’s exchange rate unification. This policy change, which took effect on June 14, 2023, merged multiple exchange rates into the Importers and Exporters (I&E) window, resulting in a devaluation of the naira to N664 per dollar. The depreciation of the currency has had various repercussions on the nation’s economy, including a surge in public debt.

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