Nigeria Pursues $500 Million Loan from World Bank for Education
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The Nigerian government is in discussions with the World Bank to secure a $500 million loan aimed at enhancing basic education in the country. This information comes from the Programme Information Document (PID) for the loan project, which was obtained by PUNCH on Friday.
This funding initiative is part of the World Bank’s HOPE for Quality Basic Education for All program, designed to improve learning outcomes and address the issue of out-of-school children. The project is expected to receive formal approval by March 2025 and represents a significant effort by Nigeria to reform its struggling educational sector.
According to the PID, the overall cost of the project is estimated at $554 million, with the World Bank providing $500 million and the remaining $54 million being sourced from a Global Partnership for Education grant. The document stated, “The HOPE-Education operation will be financed by a World Bank IDA credit of $500 million and a GPE grant of $54 million. The bank has been selected as one of two grant agents, alongside UNICEF, which will manage the other $54 million, for implementing the System Transformation Grant of $107.59 million. Programme design, oversight, and technical assistance for implementation support will be coordinated across both agents.”
The initiative aligns with the Universal Basic Education framework, aiming to expand access to early childhood education, primary, and junior secondary schooling. The UBE program addresses significant educational deficits, including the alarming statistic that 17.1 million children aged 5-14 are currently out of school.
The project also seeks to address enrollment disparities, particularly the lagging numbers in northern regions compared to the south. The implementation will be led by the Federal Ministry of Finance in collaboration with the Federal Ministry of Education and the Universal Basic Education Commission.
Funds from the World Bank loan will primarily be used to enhance teaching quality through training, support community-based schools, and provide grants for better management and infrastructure. The PID outlines that the program’s ultimate goal is to improve foundational literacy and numeracy skills among children while integrating data systems to monitor progress. Additionally, it aims to incentivize states through performance-linked grants to tackle local education challenges.
The financing model, known as Programme-for-Results, grants states flexibility in designing and implementing projects as long as they align with the operation’s objectives. The HOPE initiative is part of Nigeria’s broader Human Capital Development strategy, which aims to cultivate an educated and productive workforce by 2030.
The document notes that while Nigeria stands as Africa’s largest economy, over 40% of its population still lives in poverty, with limited access to education being a significant barrier to growth. Once approved, the funds will complement existing initiatives, including the National Home-Grown School Feeding Programme, aimed at alleviating financial burdens on parents and boosting school attendance. The initiative also focuses on closing gender gaps and increasing enrollment among children in remote and underserved areas.
The document further states, “The operation is one of three interdependent projects strategically positioned to address various challenges but designed to synergistically improve human development. HOPE-Governance aims to enhance financing availability and effectiveness, increase transparency and accountability, and improve the recruitment, deployment, and performance management of workers in basic education and primary healthcare. Meanwhile, HOPE-Primary Health Care focuses on the quantity and quality of primary healthcare services.”
On September 26, 2024, the World Bank approved $500 million for HOPE-GOV and $570 million for HOPE-PHC. HOPE-Education is the final project among these three related initiatives, with its expected approval date set for March 20, 2025.
Under President Bola Tinubu’s administration, the Federal Government has secured a total of $6.45 billion in loans from the World Bank within just 16 months. These projects include loans for power ($750 million), women empowerment ($500 million), girls’ education ($700 million), renewable energy ($750 million), economic stabilization reforms ($1.5 billion), and resource mobilization reforms ($750 million).
In a recent statement, the World Bank Country Director for Nigeria, Dr. Ndiame Diop, expressed the institution’s willingness to provide additional loans and technical assistance to support ongoing reforms in Nigeria. He affirmed this commitment while addressing journalists following the launch of the Nigeria Development Update report by the World Bank in Abuja on Thursday.
When asked about the possibility of continued loans to Nigeria, Diop replied, “Yes, we have several projects financed by the World Bank in the pipeline for this fiscal year. These are government projects, primarily implemented by the states.” He added, “Nigeria is a very important partner for the World Bank. We have been offering both technical support and financing. Importantly, our financing comes with technical and implementation support to ensure that things go as planned.”
According to the external debt stock report from the Debt Management Office, as of March 31, 2024, Nigeria owed the World Bank a total of $15.59 billion. By June 30, 2024, Nigeria emerged as the third-largest debtor to the World Bank’s International Development Association (IDA), reflecting a significant increase in borrowing from the institution.
World Bank financial statements indicate that Nigeria’s exposure to the IDA rose by 14.4% from $14.3 billion in the fiscal year 2023 to $16.5 billion in FY2024. This $2.2 billion increase places Nigeria among the top three IDA debtors for the first time, a notable shift from its previous position as the fourth-largest borrower in 2023. The fiscal year for 2024 runs from July 2023 to June 2024, meaning Nigeria has received at least $2.2 billion from the World Bank under President Bola Tinubu’s administration. This debt is separate from any outstanding loans from the World Bank’s International Bank for Reconstruction and Development