Nigeria servicing World Bank loans worth $14bn - Reports

By Clement Alphonsus

According to findings by a correspondent, Nigeria is currently servicing about $14.12bn worth of World Bank loans.

Based on data obtained from the website of the World Bank, the figure covered the amount disbursed on about 108 approved loans.

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

The $100.9m Multistate Agricultural Development Project (03) is the oldest loan 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.

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

In 2018, loans approved were being serviced as 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.

Also, it was 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.

Similarly, it was learnt that about 68 loans worth $4.79bn had been fully repaid over the years.

On the record, 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.

Usually, Nigeria is expected to commence servicing a number of the loans after five years of approval and up to over 30 years since the loans were concessional financing, which were below-market-rate finance, and cheaper to service.

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per annum on the Unwithdrawn Financing Balance, and a service charge of three-fourths of one per cent per annum on the withdrawn credit balance.