The Federal Government of Nigeria will begin repaying a $500 million loan from the International Development Association in 2029, with full repayment due by 2054. The funds aim to strengthen primary healthcare services, focusing on maternal and child health. Various agencies, including state governments, will manage the loan, which incurs specific charges and is contingent on performance indicators. The World Bank may provide additional loans to support economic and health initiatives amid Nigeria’s rising external debt concerns.
The Federal Government of Nigeria is set to commence repayments on a $500 million concessional loan acquired from the International Development Association starting in 2029, with full repayment extending until 2054. This financing agreement, secured through the World Bank, aligns with the Nigeria Primary Healthcare Provision Strengthening (HOPE-PHC) Programme, intended to enhance primary healthcare services, with a focus on maternal and child health as well as pandemic readiness.
The management of funds from this loan will rest with the Federal Ministry of Health and Social Welfare, collaborating with institutions including the National Primary Healthcare Development Agency and the Nigeria Centre for Disease Control and Prevention. Additionally, state governments will contribute to its implementation through local health ministries and related agencies.
Repayment terms indicate that Nigeria will service the loan semi-annually on April 15 and October 15. For the first 20 years (2029-2049), the principal will incur an interest rate of 1.65% annually, increasing to 3.40% from 2049 until the final repayment in 2054. Charges on unutilized funds and withdrawn balances will add to the loan’s costs, with potential adjustments due to currency fluctuations.
Disbursement of funds will hinge on achieving specific healthcare performance metrics such as increased access to services and enhanced pandemic response capabilities. A significant allocation will also enhance digital health infrastructure and improve health resilience, particularly for vulnerable populations.
Despite the favorable loan conditions, concerns over Nigeria’s escalating external debt and repayment burdens persist. Given the depreciation of the naira, the actual cost of repayment in local currency may significantly escalate over the loan term. The loan was officially approved on September 26, 2024, with operations commencing in fiscal year 2025 and a closing expected by June 30, 2029, leading to a 25-year repayment liability.
The World Bank is anticipated to approve up to $1.13 billion in additional loans to Nigeria, encompassing various projects aimed at enhancing economic resilience and public health. Among these, the Accelerating Nutrition Results in Nigeria 2.0 programme and the Community Action for Resilience and Economic Stimulus Programme are notable, focusing on nutrition and community economic initiatives respectively.
Moreover, the HOPE for Quality Basic Education for All programme aims to uplift educational standards through infrastructure improvements and teacher training. Nigeria’s ongoing economic trials, including foreign exchange constraints and fiscal deficits, underscore the urgency behind these loan negotiations, as the Central Bank of Nigeria reported $5.47 billion spent on external debt servicing in early 2025, reflecting an increasing fiscal burden.
In summary, Nigeria’s $500 million loan from the World Bank marks a significant step towards bolstering its primary healthcare sector, particularly in maternal and child health, pandemic preparedness, and health infrastructure. The structure of repayments, management by key health agencies, and the stipulations for fund disbursement indicate a focused approach to improving health outcomes. However, Nigeria’s rising external debt poses challenges that necessitate careful fiscal management over the long repayment period. The anticipated additional loans from the World Bank reflect ongoing efforts to address critical economic and health issues, fundamental for Nigeria’s recovery and resilience.
Original Source: punchng.com
