Nigeria is set to increase its borrowings from the World Bank to $9.25 billion over three years, as President Bola Tinubu’s administration plans to secure six new loans totaling $2.23 billion in 2025.
According to data from the World Bank’s official website, Nigeria’s loan approvals from the institution have been on the rise since 2023, highlighting the country’s growing reliance on external financing.
In 2023 alone, the World Bank approved $2.7 billion in loans for Nigeria, with the funds directed toward renewable energy, women’s empowerment, education, and power sector reforms.
Among the key projects that received funding that year, were $750 million for the Nigeria distributed access through renewable energy scale-up project, aimed at expanding private sector-led electricity access, and $700 million for the financing for adolescent girls initiative for learning and empowerment, designed to improve secondary education for girls in selected regions.
Others are $500 million for the Nigeria for women programme scale-up project, to support unbanked women’s economic opportunities, and $750 million for the Nigeria – af power sector recovery performance-based operation, intended to enhance electricity supply reliability and financial sustainability.
By 2024, Nigeria’s borrowings increased further, with the World Bank approving an additional $4.32 billion for various projects.
While Nigeria continues to take on more debt, the cost of servicing existing loans remains a heavy burden on the economy.
Government data from the open treasury portal reveals that the country spent N8.1trillion on debt servicing in 2024 alone.
This include N5.299 trillion for servicing internal public debt, and N2.747 trillion for servicing external public debt. The N8.046 trillion spent on debt servicing in 2024, significantly outweighed allocations to key sectors.
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For instance, electricity infrastructure construction under the State House budget received N74.3 billion; water facilities funding stood at N31.8 billion; hospitals and health centers were allocated N40.2 billion; public school rehabilitation got just N13.4 billion; road repairs and rehabilitation were allocated N384.485 billion, still far below debt servicing costs.
Nigeria’s increasing reliance on external loans has raised concerns about the country’s long-term financial stability.
With debt servicing consuming a significant portion of government revenue, experts warn that future budgets may struggle to fund essential public services.
As the government continues to borrow, pressure is mounting to ensure that the loans are effectively utilized for economic growth and development, rather than adding to the nation’s already high debt burden.
