The World Bank is poised to approve a $500 million loan to Nigeria under the Rural Access and Agricultural Marketing Project – Scale Up (RAAMP-SU), a move aimed at enhancing rural infrastructure and market accessibility. The Washington-based institution is set to make its decision on Friday, December 13, 2024.T
he RAAMP-SU is designed to bridge the gap between rural communities and broader markets, improving access to agricultural hubs, schools, and hospitals, while fostering social cohesion. It also seeks to promote women’s representation in the transport sector, creating opportunities for more inclusive development.
States wishing to participate in the project must meet strict eligibility criteria. These include having fully functional Roads Funds and Roads Agencies with appointed boards and staff, as well as budgetary provisions for administrative costs. Additionally, resettlement and compensation plans must be implemented for any project activities causing displacement. The World Bank document highlights that funds under RAAMP-SU will be allocated competitively based on states’ socio-economic needs, project readiness, and commitment to infrastructure maintenance, with potential co-financing from state resources.
If approved, this will be the 10th World Bank loan project under President Bola Ahmed Tinubu’s administration. Since assuming office 16 months ago, the Federal Government has secured $6.45 billion in loans from the institution, including three recent approvals totaling $1.57 billion. Tinubu’s government has utilized loans for key projects, such as power infrastructure ($750 million), women’s empowerment ($500 million), renewable energy ($750 million), and economic reforms ($1.5 billion).
However, Nigeria’s rising debt profile has raised concerns. As of June 2024, the country’s total debt stood at ₦134.3 trillion, with projections indicating further increases as new loans are factored in. Over the past five years, the World Bank has approved 35 loans for Nigeria, totaling $24.088 billion, financing various initiatives to address the country’s infrastructure and development gaps.
Economists and public figures, including former President Olusegun Obasanjo and Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, have expressed alarm over the growing debt burden. They argue that the increasing reliance on loans poses significant risks to fiscal stability and threatens the well-being of future generations. While these loans are crucial for addressing Nigeria’s infrastructural deficits, concerns linger over the sustainability of borrowing at such scale and the effective utilization of the funds.
The World Bank’s anticipated approval of the RAAMP-SU loan represents another step in Nigeria’s pursuit of economic growth. However, it underscores the delicate balance between development needs and the country’s financial sustainability.
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