Nigeria Secures $500 Million Health Loan from World Bank with…

Nigeria will repay a $500 million loan sourced from the World Bank between 2029 and 2054, focusing on primary healthcare improvements. The repayment will involve biannual payments, with interest rates increasing over time. This loan aims to enhance healthcare services while addressing concerns over rising external debt and the economic impacts of currency fluctuations.

The Federal Government of Nigeria will begin repaying a $500 million concessional loan secured from the International Development Association starting in 2029, with full repayment due by 2054. This loan is part of the Nigeria Primary Healthcare Provision Strengthening Programme, aimed at enhancing primary healthcare services, particularly in maternal and child health, emergency medical care, and pandemic preparedness.

The funding will be managed by the Federal Ministry of Health and Social Welfare, collaborating with key agencies such as the National Primary Healthcare Development Agency and the Nigeria Centre for Disease Control and Prevention. Additionally, state governments will partake in the implementation through their respective health ministries and other agencies.

Repayment of the loan will occur biannually, with payments due on April 15 and October 15. From 2029 to 2049, Nigeria will pay back the principal at an annual interest rate of 1.65%, which will increase to 3.40% from 2049 to 2054. Furthermore, a commitment charge of 0.5% applies to unwithdrawn funds, alongside a service charge of 0.75% on withdrawn amounts.

The overall repayment cost could vary due to currency conversion adjustments. Disbursement of funds will be contingent on achieving specific healthcare performance indicators, including expanding access to primary healthcare and strengthening pandemic responses. A significant portion of funding will also focus on enhancing digital health infrastructure and increasing health insurance enrollment among vulnerable populations.

Despite the favorable loan terms, there are concerns about Nigeria’s rising external debt and debt servicing risks, especially given the depreciation of the naira. The loan was approved on September 26, 2024, with operational activities set for fiscal year 2025, and a closing date of June 30, 2029.

Nigeria is anticipated to receive additional financial support from the World Bank, with potential approvals for up to $1.13 billion before March 2025 to aid in economic resilience, health security, and education reforms. Key projects under negotiation include the $80 million Accelerating Nutrition Results in Nigeria 2.0 program, aimed at combating malnutrition, and the $500 million Community Action for Resilience and Economic Stimulus Programme.

Moreover, the HOPE for Quality Basic Education for All programme, with a proposed funding of $552.2 million, seeks to enhance basic educational quality. These negotiations come amidst Nigeria’s ongoing economic challenges, which include foreign exchange liquidity issues, fiscal deficits, and increasing debt servicing burdens. Recent data indicates that Nigeria spent approximately $5.47 billion on external debt servicing from January 2024 to February 2025, reflecting the growing strain on the economy.

In summary, Nigeria’s $500 million loan from the World Bank aims to bolster healthcare services over a 25-year repayment period. The funds will be allocated to improving maternal and child health, alongside other healthcare initiatives. Despite the benefits, rising external debt and currency fluctuations present challenges to repayment. Additional financial assistance from the World Bank could significantly impact Nigeria’s economic conditions, especially in health and education sectors.

Original Source: punchng.com