World Bank Approves $1.57bn Loans for Nigeria to Boost Healthcare and Combat Climate Challenges
The World Bank has approved three new loan requests totalling$1.57bn to support Nigeria’s efforts in improving healthcare for women, children, and adolescents, and bolstering resilience to climate change impacts such as floods and droughts.
In a statement released on Monday, the global financial institution outlined its support for projects that will address the country’s critical human capital needs while enhancing dam safety and irrigation to protect against environmental challenges.
“The World Bank has today approved three operations for a total of $1.57bn to support the Government of Nigeria in strengthening human capital through better health for women, children, and adolescents, and building resilience to the effects of climate change, such as floods and droughts, through improving dam safety and irrigation,” the statement read.
The loans will finance three key projects: $500m for governance reforms in education and healthcare, $570m for the Primary Healthcare Provision Strengthening Programme (HOPE-PHC), and $500m for the Sustainable Power and Irrigation for Nigeria (SPIN) project.
The HOPE-GOV and HOPE-PHC programmes will help Nigeria enhance service delivery in basic education and healthcare, essential sectors for improving human capital outcomes. The SPIN project will focus on improving dam safety and irrigation management to better handle Nigeria’s water resources for hydropower and agriculture.
The World Bank’s approval underscores its commitment to addressing Nigeria’s governance challenges, particularly those constraining education and healthcare. The $500m HOPE-GOV programme will target governance weaknesses in key systems to help reduce maternal and under-five mortality rates, benefitting an estimated 40 million people. An additional $70m in grant financing from the Global Financing Facility will bolster support for the project.
In a broader context, this marks yet another significant loan for Nigeria, which has secured $6.52bn in financing from the World Bank since the start of President Bola Tinubu’s administration. However, this borrowing spree has sparked concerns about the rising costs of external debt servicing, with critics warning of its long-term impact on the economy.
The HOPE-PHC initiative aims to improve the quality of healthcare services, focusing on reproductive, maternal, and child health to significantly reduce mortality rates. It is financed by a $500m credit from the International Development Association (IDA), supplemented by grants from the UK Foreign, Commonwealth & Development Office and the Children’s Investment Fund Foundation.
The SPIN project, which will be supervised by Nigeria’s Federal Ministry of Water Resources, is set to improve irrigation and water management across 40,000 hectares, benefitting up to 950,000 people, including farmers and livestock breeders. The programme is part of a broader effort to protect citizens from climate-induced disasters and will also support the development of a hydropower master plan.
Dr. Ndiamé Diop, the World Bank Country Director for Nigeria, stressed the significance of the new financing. “Effective investment in the health and education of Nigerians today is central to increasing future employment opportunities, productivity, and earnings while reducing poverty,” Diop stated. He added that the SPIN project will provide much-needed protection against floods and droughts while contributing to the country’s hydropower capacity.
The World Bank’s financial backing comes at a time when Nigeria’s external debt to the institution stands at $15.59bn, as of March 31, 2024, raising questions about the sustainability of such borrowing. Despite these concerns, the government remains committed to securing additional loans, with another $500m for the Rural Access and Agricultural Marketing Project expected to be approved by December 2024.
This latest round of financing follows the bank’s approval of two major loan projects in June, amounting to $2.25bn, aimed at economic stabilisation and supporting vulnerable populations.
With six major loan projects approved this year, including those for power, renewable energy, and women’s empowerment, Nigeria’s engagement with the World Bank is deepening, but so too is the debate about its growing debt burden and the long-term cost of international borrowing.
