The Federal Government of Nigeria has secured a $500 million concessional loan from the International Development Association (IDA), a branch of the World Bank. This financing agreement, part of the Nigeria Primary Healthcare Provision Strengthening Programme (HOPE-PHC), aims to enhance primary healthcare services across the nation. The focus areas include maternal and child health, emergency medical care, and pandemic preparedness.
Management and Implementation
The Federal Ministry of Health and Social Welfare will oversee the management of these funds. Key agencies involved include the National Primary Healthcare Development Agency, the National Health Insurance Authority, and the Nigeria Centre for Disease Control and Prevention. State governments, through their respective Ministries of Health and Primary Healthcare Development Boards, will also play significant roles in implementing the program.
Repayment Structure
According to the financing agreement, Nigeria will begin repaying the loan in 2029, with repayments extending until 2054. The repayment schedule requires semi-annual installments due every April 15 and October 15. From 2029 to 2049, the principal repayment rate is set at 1.65% per annum. This rate will increase to 3.40% from 2049 until 2054. Additionally, the loan carries a commitment charge of 0.5% on unwithdrawn funds and a service charge of 0.75% on withdrawn balances.
Performance-Based Disbursement
The disbursement of funds under this program is contingent upon achieving specific healthcare performance indicators. These indicators encompass increasing access to primary healthcare services, expanding emergency obstetric and neonatal care, improving the supply of essential medicines, and strengthening Nigeria’s pandemic response framework. A significant portion of the funds will also be allocated to enhancing digital health infrastructure, improving climate resilience in the health sector, and ensuring greater enrollment of vulnerable populations in health insurance schemes.
Concerns Over Rising Debt
Despite the concessional terms of the loan, there are concerns regarding Nigeria’s escalating external debt and the associated servicing obligations. The continued depreciation of the naira could significantly increase the real cost of repayment in local currency over the loan’s 25-year repayment period. As of the first quarter of 2024, Nigeria’s public debt stock, encompassing both external and domestic debt, stood at approximately N121.67 trillion (US$91.46 billion). This marked a growth rate of 24.99% compared to the previous quarter.
Additional World Bank Loans
In addition to the HOPE-PHC program, the World Bank is considering approving a total of $1.13 billion in loans for Nigeria before the end of March 2025. Among the projects set for negotiation is the Accelerating Nutrition Results in Nigeria 2.0 program, valued at $80 million, which aims to improve nutrition outcomes, particularly among vulnerable groups. Another project is the Community Action for Resilience and Economic Stimulus Programme, with a commitment value of $500 million, designed to provide economic stimulus for community-driven initiatives to strengthen economic resilience and growth. Additionally, the HOPE for Quality Basic Education for All program, with proposed funding of $552.2 million, seeks to improve the quality of basic education by addressing infrastructure deficits, enhancing teacher training, and increasing educational accessibility across the country.
Debt Servicing Obligations
Nigeria’s debt servicing obligations have been on the rise. Between January 2024 and February 2025, the country expended a total of $5.47 billion on external debt servicing, according to data from the Central Bank of Nigeria. This growing burden of debt obligations poses challenges to the country’s external reserves and fiscal stability.
Conclusion
While the $500 million IDA loan under the HOPE-PHC program aims to significantly improve Nigeria’s primary healthcare services, it also adds to the country’s growing external debt. The government faces the challenge of balancing the immediate benefits of such loans with the long-term implications of debt servicing, especially in the context of a depreciating naira and existing fiscal pressures.
