An expert said the new plan reflects the government’s misplaced priorities. On Wednesday, Finance Minister Zainab Ahmed announced that Nigeria has secured an $800 million World Bank facility. She described the amount as the first tranche of palliatives to be disbursed as cash transfers to about 50 million of the country’s most vulnerable citizens. A document seen by Premium Times shows that the financing agreement is between Nigeria and the International Development Association (IDA), the World Bank arm that assists the world’s poorest nations. The $800 million is classified as “concessional financing,” meaning it carries more generous terms than market loans, such as below‑market interest rates and grace periods, according to the United States Agency for International Development.
The facility agreement was signed by Nigeria and the IDA on 16 August 2022. It aims to provide cash transfers to poor and vulnerable people in both rural and urban areas for at least two years, responding to economic shocks. The project also seeks to strengthen the safety‑net delivery system through digital technologies, expanded coverage, and improved efficiency. The loan carries a 0.5 percent annual commitment charge, a 0.75 percent service charge on the withdrawn balance, and a 1.25 percent interest charge on the withdrawn balance. Repayment will be made in installments due on 15 January and 15 July each year, with the first payment on 15 January 2027 and the final one on 15 July 2051. Payments are expressed as a percentage of the principal and will increase over time—from 1.65 percent for the first payment to 3.40 percent for the last. The loan must be repaid in U.S. dollars, becomes effective 120 days after signing, and terminates 20 years after the signature date. Nigeria has pledged to implement the project in accordance with the agreement.
Since the announcement, many Nigerians have voiced concerns about the loan’s sustainability and its potential to worsen the nation’s debt burden. In January, Debt Management Office Director‑General Patience Oniha reported that Nigeria’s total debt stock rose to N44.06 trillion by the end of September 2022, largely due to a weakened naira. She warned that the next administration could inherit a public debt of about N77 trillion if Ways and Means Advances from the Central Bank of Nigeria are securitized. A Premium Times report showed that CBN advances to the federal government surged 2,900 percent over seven years to N23.8 trillion, breaching legal limits, stoking inflation, and increasing the debt burden. The CBN Act permits temporary advances for budget deficits but caps outstanding advances at 5 percent of the previous year’s federal revenue and requires repayment by the end of the fiscal year; failure to repay restricts further advances.
President Buhari’s attempt to obtain approval for a loan already spent sparked a Senate uproar, with lawmakers accusing him of constitutional violations and demanding transparency on fund usage. If securitized, the next administration could inherit a N77 trillion debt, according to the Debt Management Office.
Kelvin Emmanuel, CEO of Dairy Hills, echoed the criticism, calling the new move a reflection of misplaced priorities. He noted that the federation’s current debt stock stands at N46.25 trillion, with state governments accounting for only 13.7 percent and external debt at N18 trillion. Emmanuel said the federal government is seeking to convert N23.7 trillion in CBN overdrafts into a 40‑year government bond while also pursuing N7.5 trillion in bilateral loans, treasury bills, and Eurobonds for deficit financing in the 2023 appropriation act. He highlighted that the budget allocates only 4.98 percent each to education and health, far below the 15 percent standard set by WHO and UNESCO in the 2010 Abuja Declaration. With inflation at 21.9 percent and projected post‑subsidy food prices between N580 and N782, Emmanuel questioned the wisdom of giving 7,000‑10,000 naira to 10 million households. He also pointed out Nigeria’s infant mortality rate of 5.7 percent and a doctor‑to‑population ratio of one per 10,000, far below the WHO benchmark of 2.5 doctors per 1,000. Emmanuel argued that the loans would be better used in a revised budget that increases allocations to education and health, noting that past cash hand‑outs have not reduced the projected 40.6 percent unemployment rate for 2023 or raised per‑capita income, which has fallen 48.5 percent to $2,100 over eight years.
Historically, the federal government has accessed low‑interest loans and grants from the World Bank’s IDA and the International Bank for Reconstruction and Development (IBRD). For example, of the $104 million released to Nigeria’s social investment programme in the 2018‑2019 cycles, $27,099,028 came from IDA credit. Funds were channeled through programmes such as N‑Power, the Government Enterprise and Empowerment Programme (GEEP), the National Home‑Grown School Feeding Programme (NHGSFP), and Trader Moni. However, implementation has been marred by allegations of fraud and misallocation. In July 2022, the Human Rights Writers Association of Nigeria (HURIWA) labeled the $1 billion annual allocation for the National Social Investment Programme the “single biggest fraud in Africa,” criticizing the opaque and allegedly false school‑feeding scheme that provides poor‑quality food to pupils. The National Assembly also condemned the federal government’s approach to distributing social grants during the COVID‑19 lockdown. Premium Times’ attempts to obtain details on the modality of the new programme were unsuccessful; multiple calls and texts to Finance Ministry spokesperson Tanko Abdullah went unanswered as of Wednesday morning.
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