The World Bank’s approval of over N13.21 trillion ($8 billion) in loans for various developmental projects in Nigeria under President Bola Ahmed Tinubu’s administration in the last 20 months underscores the critical role of international financing in driving economic growth. However, while external borrowing is a viable means of funding infrastructural and social development, the onus lies on the government to ensure that these loans are judiciously utilised to achieve their intended purpose.

Nigeria’s history with loan mismanagement is not new. Successive administrations have acquired substantial foreign loans, often with little to show in terms of tangible development. Too often, funds intended for infrastructure, healthcare, education, and social programs have either been mismanaged or misappropriated, leading to mounting debt without corresponding economic benefits. This raises a crucial concern—how can the current administration ensure that these loans translate into meaningful development for Nigerians?

First and foremost, transparency and accountability must be at the core of loan management. Every dollar borrowed from the World Bank should be accounted for with clear implementation strategies, timelines, and measurable outcomes. The government should make loan agreements and their intended projects public, allowing for citizen oversight and scrutiny. Establishing an independent monitoring body comprising civil society organizations, financial experts, and representatives from relevant government agencies will ensure that these funds are directed towards their designated purposes.

Additionally, the funds should be channeled into sectors that have the potential to stimulate economic growth and reduce dependency on further borrowing. Infrastructure development, power generation, healthcare, education, and agricultural enhancement are areas that, if properly invested in, can yield long-term benefits. For instance, investing in electricity infrastructure will not only enhance industrial productivity but also improve the ease of doing business, thereby attracting foreign investments.

Another vital consideration is debt sustainability. Nigeria’s debt profile has been a subject of concern among economists and financial analysts. The nation’s ability to service its loans without jeopardizing future economic stability must be a key factor in borrowing decisions. While the World Bank offers relatively low-interest loans compared to commercial lenders, the government must ensure that borrowed funds generate sufficient revenue to cover repayment obligations. This calls for strategic investments in revenue-generating projects such as transport infrastructure (toll roads and railways), digital economy advancements, and industrialization.

Moreover, corruption remains a significant challenge in Nigeria’s public financial management. To prevent loan mismanagement, the government must strengthen anti-corruption institutions like the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC). Swift prosecution of officials found guilty of misappropriating funds will serve as a deterrent and reinforce the government’s commitment to responsible fiscal management.

Beyond the federal level, state and local governments must also be held accountable for how World Bank loans are utilised in their respective jurisdictions. Many projects often stall due to bureaucratic bottlenecks, incompetence, or outright diversion of funds. Thus, the government should establish a performance-based disbursement system where funds are released in phases based on the progress of targeted projects. This approach will ensure that loans are used for their intended purposes rather than being diverted into unproductive expenditures.

Furthermore, effective public communication on loan utilisation is essential. Nigerians deserve to know what each tranche of borrowed funds is being used for and what impact they can expect. Regular updates through official government channels, independent media, and town hall engagements will help bridge the trust gap between the government and the citizens.

In conclusion, borrowing from the World Bank is not inherently bad; rather, the challenge lies in ensuring that these loans lead to real and measurable development. The Tinubu-led administration must break away from past practices of mismanagement and set a new precedent in the judicious use of public funds. Through transparency, accountability, strategic investment, and strong anti-corruption measures, Nigeria can maximise the benefits of these loans and lay a solid foundation for sustainable economic growth.

Philemon Aduku, a public affairs analyst wrote from Maitama, Abuja