Nigeria Secures $500M World Bank Health Loan with 25-Year Repayment Plan
Nigeria to begin repaying a $500 million loan from the World Bank in 2029, aimed at enhancing healthcare services. The loan’s repayment terms include biannual payments and fluctuating interest rates, with a focus on maternal health, pandemic preparedness, and improving healthcare access. Additional loans nearing approval signal ongoing economic challenges and rising debt servicing costs.
The Federal Government of Nigeria will commence repayment of a $500 million concessional loan obtained from the International Development Association starting in 2029 and concluding in 2054. This agreement was formalized between Nigeria and the World Bank, as reported by Sunday PUNCH.
The loan is allocated for the Nigeria Primary Healthcare Provision Strengthening Programme (HOPE-PHC) and aims to enhance primary healthcare services, particularly focusing on maternal and child health, emergency medical care, and pandemic preparedness. The Federal Ministry of Health and Social Welfare will oversee the funds, collaborating with several national health agencies.
State governments will participate in the program’s execution through their Ministries of Health and other related agencies. Repayment will occur biannually, with payments due on April 15 and October 15 each year. During the initial twenty years, the principal will attract an interest rate of 1.65%, which increases to 3.40% post-2049.
The loan also imposes a commitment charge of 0.5% on unutilized funds and a service charge of 0.75% on utilized balances. It is indicated that total repayment costs may vary due to currency exchange rate fluctuations. Disbursement of the funds will be contingent upon meeting defined healthcare performance metrics.
These metrics pertain to enhancing access to primary healthcare, expanding essential medicine supply, and fortifying the pandemic response systems in Nigeria. Significant investments will also be directed towards upgrading digital health infrastructure, increasing climate resilience in health services, and bolstering enrolment of vulnerable populations in health insurance programs.
Despite the supportive loan conditions, Nigeria’s escalating external debt and servicing demands are causing concern. The depreciation of the naira may increase the actual repayment cost in local currency over the loan’s 25-year term. The loan was sanctioned on September 26, 2024, with implementation slated for the fiscal year 2025 until a proposed closing date in June 2029.
Prior to March 2025, Nigeria anticipates the World Bank will approve an additional $1.13 billion in loans targeting the enhancement of the nation’s economic resilience, health security, and educational reforms. Proposed projects under review include an $80 million program aimed at improving nutritional outcomes among susceptible groups, a $500 million community resilience initiative, and a $552.2 million education quality improvement program.
These potential loans come as Nigeria encounters significant economic hurdles, including challenges surrounding foreign exchange liquidity and burgeoning debt servicing obligations, having expended $5.47 billion on external debt servicing between January 2024 and February 2025, according to the Central Bank of Nigeria’s data.
In summary, Nigeria’s loan repayment of $500 million to the World Bank, intended for the enhancement of healthcare services, underscores both the government’s commitment to health improvements and the concerns regarding increasing debt obligations. With a structured repayment plan commencing in 2029 and additional projects under negotiation, Nigeria faces a complex economic landscape that necessitates careful management to ensure fiscal stability and health sector growth.
Original Source: punchng.com
