Nigeria servicing 108 W’Bank loans worth $14bn – Report

Nigeria is currently servicing about $14.12bn worth of World Bank loans, according to findings by The PUNCH.

The figure covered the amount disbursed on about 108 approved loans based on data obtained by our correspondent from the website of the World Bank.

The PUNCH observed that the oldest loan being serviced was approved as far back as 1989 under Gen. Ibrahim Babangida, while the most recent loan being serviced was approved in 2018 under the former administration of Muhammadu Buhari.

The oldest loan is the $100.9m Multistate Agricultural Development Project (03), which was approved to support the implementation of the state-wide Agricultural Development Projects, with the objective of increasing food/crop production and the income of small farmers.

The PUNCH observed that although the principal amount for the project was placed at $100.9m, a total of $106.7m was disbursed.

Loans approved in 2018 were being serviced, disbursing funds, as they were categorised under ‘Disbursing & Repaying’.

One of such loans was the $125m fiscal governance and institutions project, which was approved on June 27, 2018.

As of the time the data was obtained by our correspondent, about $40.17m had been disbursed under this loan project.

Another loan project under disbursing and repaying was the $750m Fiscal Governance and Institutions Project, which was approved on June 27, 2018.

It was disclosed that $737.13m had been disbursed under this loan.

There was an additional $750m loan approved on December 14, 2020, under this loan project.

However, this second approval was undergoing disbursement with no repayment required yet.

The PUNCH observed that the $364m loan and the $122m loan approved in 2018 under the Electricity Transmission Project were currently being repaid while disbursement is still ongoing.

The PUNCH also learnt that about 68 loans worth about $4.79bn had been fully repaid over the years.

The International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank, had, over the years, advanced loans to Nigeria.

The IBRD lends to governments of middle-income and creditworthy low-income countries, while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.

Nigeria is usually expected to begin servicing a number of the loans after five years of approval and up to over 30 years.

Since the loans were usually concessional financing, they were below-market-rate finance, and cheaper to service.

For instance, the $800m loan from the World Bank to provide post-petroleum subsidy palliatives for over 50 million Nigerians attracts a maximum commitment charge rate of one-half of one per cent per annum on the Unwithdrawn Financing Balance, and a service charge of three-fourths of one per cent per annum on the withdrawn credit balance.