Nigeria Applies for $65 Million World Bank Loan to Boost Procurement
- The Nigerian government is set to secure an additional World Bank loan of $65 million to boost its procurement process
- The loan will raise the total funding for a project to $145 million if approved and is set to be finalised by June 30, 2025
- Data from the Debt Management Office (DMO) shows that Nigeria’s debt to the World Bank rose by $2.36 billion in 2024
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade
The Nigerian government is currently in an advanced talk with the World Bank to secure an additional $65 million loan for a Sustainable Procurement, Environmental, and Social Standards Enhancement Project (SPESSE).
If approved, the funding will raise the total project financing to $145 million and is expected to be finalised by June 30, 2025.
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World Bank to increase SPESSE project
Information obtained from the World Bank website shows that the global lender approved an initial loan of $80 million for the project in February 2020 to reform Nigeria’s procurement process and boost compliance with environmental and social standards.
The document showed that the project’s aim is to develop sustainable capacity in managing procurement, environment, and social standards in the public and private sectors.
New World Bank loan to improve procurement
Following recent happenings, the World Bank has agreed to raise the financing by $65 million, bringing the project’s total funding to $145 million.
On the final funding, the document stated that the bank would maintain the PDO of the parent project without charges.
The project became effective in March 2021 and has already made significant progress in improving Nigeria’s public procurement systems, addressing inefficiencies and corruption, and boosting greater compliance with environmental and social standards.
The Punch reports that the project has played a crucial role in modernising Nigeria’s procurement guidelines, with over 33,000 participants already trained in procurement and E&S practices.
New loan will boost procurement training
The loan will help to expand the efforts, especially via the establishment of the Electronic Government Procurement system, which is expected to improve transparency, reduce procurement delays, and ensure efficient use of public funds.
It will also promote an inclusive government, benefitting small and medium-sized enterprises, including women-led businesses.
The additional funds will also be utilised to scale up the certification programme to develop a new generation of procurement professionals across Nigeria’s public sector.
The funding is crucial for institutionalising procurement practices in Nigeria, ensuring that systems remain transparent.
The new facility will accelerate the project’s implementation, helping to meet the growing demand for sustainable procurement practices and the professionalisation of the workforce.
The loan’s final approval is set for June 30, 2024.
Nigeria’s debt to World Bank balloons
According to data from the Debt Management Office (DMO), Nigeria’s debt to the World Bank rose by $2.36 billion in 2024, pushing Nigeria’s obligations to the global lender from $15.45 billion in 2023 to $17.81 billion as of December last year.
The data shows that Nigeria’s debt to the IDA increased from $14.96 billion to $16.56 billion, while loans from the IBRD rose significantly from $85.54 million to $1.24 billion.
By the end of last year, Nigeria’s total external debt stood at $45.78 billion, with the World Bank accounting for 38.9% of the amount at $17.81 billion, up from 36.4% the previous year.
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The World Bank now represents 79.8% of Nigeria’s total multilateral debt, which stood at $22.32 billion at the end of last year, as the country obtained $1.1 billion last year.
Expert predicts Nigeria’s debt to hit N150tn in 2025
Legit.ng earlier reported that Nigeria’s public debt had been projected to hit a new high before the end of the first quarter of this year, at N150 trillion from N142 trillion as of September 31, 2024.
The new forecast was based on the latest figure of N142 trillion released by the Debt Management Office (DMO).
DMO data showed that Nigeria’s public debt rose to N142.3 trillion as of September 30, 2024, an increase of 5.97%. This represented N8.02 trillion compared to N134 trillion in June 2024.
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