Tinubu borrows $6.5bn from World Bank as Nigeria’s debt profile exceeds N129trn

IN a period of 16 months, President Bola Ahmed Tinubu borrowed a total sum of $6.45 billion from the World Bank, according to a document seen on the global lender’s website.

The $6.45 billion captures loans borrowed by Mr Tinubu between May 29, 2023 and September 2024.

Since June 2024, President Tinubu has borrowed $3.82 billion from the World Bank. In addition to $500 million borrowed by the Tinubu-led administration from Africa Development Bank (AfDB), total loans borrowed by Nigeria’s current government since March 2024 stand at $4.32 billion.

Nigeria’s public debt stood at N121.67 trillion as of March 2024, according to data from the Debt Management Office (DMO). Data on Nigeria’s 2024 second quarter (Q2) debt profile are yet to be released. However, Mr Tinubu has not stopped borrowing since then.

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Based on Economy Post‘s calculations, Mr Tinubu has borrowed $4.32 billion since March this year, which is yet to be captured in the official data. The currenct naira value of the recent loan is N7.020 trillion.

When N7.020 trillion is added to N121.67 trillion, it sums up to N128.69 trillion.

World Bank recent loans

In June 2024, the World Bank sanctioned N2.25 billion to enable the Nigerian government to sustain its reform momentum, boost non-oil resource mobilisation, and support poor Nigerians. 

The global bank said $1.5 billion was for the country’s Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme (DPF), while $750 million was for the Accelerating Resource Mobilisation Reforms (ARMOR) Programme-for-Results (PforR).

Nigeria’s Finance Minister and Coordinating Minister for the Economy, Mr Wale Edun, in his response, said: “We welcome the support of the RESET and ARMOR programme as we further consolidate and implement our macro-fiscal and social protection policy reforms, consistent with accelerating investment and redirecting public resources sustainably to achieve development priorities.”  

World Bank Vice President for Western and Central Africa, Mr Ousmane Diagana, said Nigeria’s efforts towards implementing far-reaching macro-fiscal reforms had positioned it on a new path to stabilise its economy and lift citizens out of poverty. 

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He said, “This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”

In a separate statement, Director of Information and Public Relations, Federal Ministry of Finance, Mr Mohammed Manga, revealed that the RESET DPF was aimed at strengthening the country’s economic policy framework, creating fiscal space, and protecting the poor and vulnerable.

Also, the World Bank approved $1.57 billion on September 26, 2024, to strengthen human capital in Nigeria. The funds will help to mitigate the impact of climate change, particularly floods and droughts, in Nigeria through improvement in dam safety and irrigation.

The new financing includes $500 million for addressing issues that constrain the delivery of education and health (HOPE-GOV), $570 million for the Primary Healthcare Provision Strengthening Program (HOPE-PHC) and $500 million for the Sustainable Power and Irrigation for Nigeria Project (SPIN).

The World Bank further said that the funds will likewise support of the government’s newly launched reforms in the health sector, under the Health Sector Renewal Investment Initiative.

“The HOPE-PHC project will improve the quality and utilization of core reproductive, maternal, newborn, child, and adolescent health and nutrition services to substantially reduce maternal and under five mortality and to improve the resilience of the health system— benefiting 40 million people, especially vulnerable populations,” the global lender further said.

AfDB $500m loan

In July 2024, the Board of Directors of the African Development Bank Group approved a loan of $500 million to Nigeria to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), a new program aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.

The loan was expected to help close the financing gap of the budget in the 2024/25 fiscal year, specifically supporting the implementation of the country’s new Electricity Act and the Nigeria Energy Transition Plan.

The AfDB said its $500 million support to Nigeria was the latest in a series of initiatives aimed at supporting the country’s economic growth, poverty reduction, and climate action efforts.

Loans and more loans under Buhari

Under former President Muhammadu Buhari, Nigeria’s public debt rose from N25.7 trillion to N88.38 trillion, representing 244 percent increase over the period, Economy Post reported. This was under the National Assembly leadership of Mr Ahmed Lawan.

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Under Mr Lawal, President Buhari violated Section 38 (2) of the Central Bank of Nigeria (CBN) Act, which says: “The total amount of such advances outstanding shall not at any time exceed five percent of the previous year’s actual revenue of the Federal Government.”

Mr Lawan allowed Mr Buhari to exceed the 5 percent “ways and means” threshold, raising Buhari’s loans from the CBN from zero to N22.7 trillion in 8 years. In fact, there was little division of power between the executive and the legislature from 2019 and 2023, analysts said.

“Dr Ahmed Lawan’s Senate presidency was not people-oriented. He and Mr Femi Gbajabiamila cannot be exempted from the economic inactions of Buhari’s government. If they had put some pressure on the executive in respect of borrowings, the results could have been different,” said United Kingdom-based economist, Ms Maryjane Thelma.

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