By Anthony Otaru, Abuja
Financial experts have slammed the Federal Government over soaring World Bank $9.25bn loan in just two years.
They said that despite President Bola Tinubu’s government’s borrowing, Nigerians had yet to feel the positive impacts of the huge loans.
Findings by ThisNigeria reveal that the people are already asking questions on why the continuous borrowing, instead of looking inwards and cutting the cost of governance to stabilise the financial needs of the country
It was reported last week that the Federal Government under President Bola Tinubu secured another World Bank loan of $6.35m to support critical areas such as nutrition improvement and quality education.
This brings the total number of World Bank facilities received by the present administration in the last two years to about $9.25 bn.
Speaking to ThisNigeria on the subject matter, the President of the Institute of Fiscal Studies (IFS), Godwin Ighedosa, said Nigeria doesn’t need to borrow more loans because it has no capacity to pay them back.
Ighedosa explained that under normal circumstances, loans are not bad, but they should be identified for specific projects that will bring returns on investments to enable government repayment.
He cautioned the government to look inward, especially in cutting down the cost of governance and fighting corruption.
He said, “It is unfortunate that we are celebrating high-profile people in government. This is not working for us. We must build solid institutions that will make it difficult for those in power to manipulate the system and eradicate corruption. This is the best way our loans could be better utilised.”
Ighedosa also advocated for a workable National Strategy Development Plan, adding, “So I actually want to see our country come up with at least 20-year strategic National Development plan that, if we implement it, will make Nigeria’s economy great again.
“Instead of relying on borrowings, the government can encourage private finance initiatives, which has now become the best alternative for developing countries like ours; this will enable the government to attract and promote investors into the country to turn around the economy; the government must in its wisdom put in place good health care, education, security infrastructures that will assist the investors in striving.”
A distinguished scholar and renowned Professor of Economics, Sheriffdeen Tella, said that research has shown that loans borrowed have not been beneficial to the country in the short and long run.
He said it implied that there had been several mismanagement of the loans along the line.
“Nigeria earns huge sums from crude oil and the non-oil sectors; these have not translated to better lives for the people,” Tella added.
He lamented that, unfortunately, the Tinubu government is following Muhammadu Buhari’s steps in borrowing.
He stressed that Buhari’s government borrowed so much that international lenders refused to lend to the country, and it reverted to domestic borrowing.
“This government has been paying the Buhari debt to make it easy to borrow, which is what has been happening; the government just put the country in a cycle of debt. What are they borrowing money for health and education that we cannot use what we earn from oil and other income-earning ventures or non-oil sector.”
*SERAP demands rejection of new $1.08bn loan
Meanwhile, the Socio-Economic Rights and Accountability Project (SERAP) has urged President Bola Tinubu “to reject the recently approved $1.08bn World Bank loan.
It urged the President to direct the Attorney General of the Federation and Minister of Justice, Mr Lateef Fagbemi (SAN), and appropriate anti-corruption agencies to promptly investigate the allegations that over N233bn of public funds are missing, diverted or unaccounted for by the Nigerian Bulk Electricity Trading Plc in Abuja and other ministries, departments and agencies ((MDAs).
SERAP said, “Anyone suspected to be responsible should face prosecution as appropriate if there is sufficient admissible evidence, and any missing public funds should be fully recovered and remitted to the treasury.”
According to SERAP, “the recovered N233bn should be used to fund the deficit in the 2025 budget and to ease Nigeria’s crippling debt crisis.”
Last week, the World Bank approved a $1.08bn loan for Nigeria to ‘enhance education quality, build household and community resilience, and improve nutrition for underserved groups.’
In the letter dated April 5 2025, and signed by SERAP deputy director Kolawole Oluwadare, the organisation said, “The World Bank loan is neither necessary nor in the public interest, especially given the country’s crippling debt burden, and a staggering amount of missing public funds from MDAs that your government has failed to probe or recover.
“The Federal Government should not collect any loan from the World Bank or any other institutions and agencies until the missing N233bn is fully recovered, consistent with the Nigerian Constitution 1999 [as amended] and the country’s international obligations.”
The letter, read in part, states, “SERAP is seriously concerned that the Federal Government and Nigeria’s 36 states and the Federal Capital Territory continue to face a debt crisis and vicious debt cycles, are in debt distress, or are at high risk of debt distress.
“According to the UN Independent Expert on foreign debt and human rights, Nigeria faces debt service relative to tax revenues that exceed 20 per cent, with escalating social tensions linked to poverty and inequality.
“The damning revelations about the missing N233bn are documented in the 2021 audited report published on Wednesday, November 13 2024, by the Office of the Auditor-General of the Federation.
“The allegations suggest a grave violation of the public trust, the Nigerian Constitution 1999 (as amended), the country’s anti-corruption legislation and international anti-corruption obligations. There is a legitimate public interest in ensuring justice and accountability for these grave allegations.
“We would be grateful if the recommended measures are taken within seven days of this letter’s receipt and/or publication. If we have not heard from you by then, SERAP shall consider appropriate legal actions to compel your government to comply with our request in the public interest.”
