World Bank Clarifies $10.50 Million Funding Request for CBN as Nigeria’s Debt Hits N144.6 Trillion
- The World Bank has disclosed that the planned $10.50 million financing for the Central Bank of Nigeria was not a loan
- The World Bank said the fund is a grant under the Finance for Development Multi-Donor Trust Fund as a partnership with the CBN
- The development comes as Nigeria’s debt profile soared to N144.6 trillion at the end of 2024 from N97.3 trillion the year before
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The World Bank has clarified that the planned $10.50 million financing for the Central Bank of Nigeria is a grant and not a loan.
A source at the World Bank reportedly disclosed that the amount came under the Finance for Development Multi-Donor Trust Fund as part of a partnership between the global lender and the CBN.
Source: Twitter
World Bank’s $10.5m to CBN is a grant
Legit.ng earlier reported that Nigeria sought to borrow $10.50 million to boost CBN’s technical capacity and modernise the country’s domestic payment infrastructure.
The World Bank’s website had described the apex bank as a borrower for the project.
However, due to the statement, further findings revealed that the amount was meant as a grant to support the project.
Punch reports that the World Bank often lends to Nigeria under the IDA and IBRD.
Punch reports that the grant is a partnership effort between the World Bank and the CBN to boost CBN’s capacity for technology-enabled, data-driven, risk-based supervision and boost domestic payment infrastructure, especially remittances.
CBN moves to boost payment systems
The project will reportedly focus on three main areas such as boosting CBN’s institutional capacity to align with technological advancements via robust governance guidelines, expert advisory support, peer-to-peer central bank changes, and modernising the bank’s internal processes.
Also, the new facility will enhance the bank’s supervisory capacity via tech and data improvements involving funding modern tech solutions, including supervisory technology systems, improving data accuracy, operational efficiency, and risk-based supervision.
Additionally, the loan will modernise domestic payment infrastructure for remittances to improve their safety and reliability.
It will explore innovative ways to attract informal remittance flows into formal avenues while conducting annual surveys on remittance households and fostering peer-to-peer learning for knowledge exchange.
Nigeria’s debt profile hits new high
The development comes as Nigeria continues to rely on borrowing to meet its fiscal obligations, with its total public debt hitting the highest level ever.
According to data released on Friday, April 4, by the Debt Management Office (DMO), the country's debt profile increased to N144.6 trillion at the end of 2024 from N97.3 trillion the year before.
Nigeria's debt, however, decreased in dollar terms, going from $108.2 billion in 2023 to $94.2 billion last year, indicating reduced volatility in the foreign currency market.
The nation's debt profile has slightly increased due to the federal government’s seeking a $2.2 billion external borrowing in 2024 to partially finance a N9.7 trillion deficit in the 2024 budget, which was later approved by the nation's lawmakers.
Nigeria’s domestic debt soars
Further analysis of the report showed a quarter-on-quarter increase of 1.65% from the N142.32 trillion ($88.89 billion) recorded at the end of September 2024, highlighting an increase in borrowing.
According to analysis, Nigeria's national debt increased by N47.32 trillion annually, or 48.58%, between December 2023 and December 2024.
Significant rises in domestic and foreign borrowing were the main causes of Nigeria's debt explosion.
Source: Twitter
From N38.2 trillion, or $42.50 billion, in December 2023 to N70.29 trillion, or $45.78 billion, in December 2024, Nigeria's external debt grew by 83.89%.
Nigeria’s debt to World Bank to rise to $9.2bn
Legit.ng earlier reported that the Nigerian government was about to secure six new loans of about $2.23 billion from the World Bank in 2025 as the bank continues to support the country’s economic reforms.
According to data from the World Bank, the new borrowings would bring Nigeria’s total debt to the World Bank to $9.25 billion in three years, showing a continued dependence on external funding to support critical sectors of the economy.
A breakdown of Nigeria’s loan approvals from the global financial institution since 2023 under President Bola Tinubu shows a rising increase in funding commitments.
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Source: Legit.ng
