Nigeria’s $10bn External Loans: Low Disbursement Highlights Slow Project Funding

The Federal Government has obtained external loans worth more than $10 billion in the past two years, though only about half of that amount—$5 billion—has been disbursed, according to figures from the Debt Management Office (DMO).

The loans were sourced from multilateral organisations, regional financial institutions, and the International Capital Market through Eurobonds. Records show that the first facility under the current administration came from Agence France de Développement, which provided €103.89 million for the i-DICE project on October 4, 2023. The loan, meant to boost Nigeria’s digital and creative economy, has a 3.5% interest rate, a seven-year moratorium, and a 2043 maturity date. So far, only €3.89 million ($4.21 million) has been released.

Other agreements include a €425.7 million loan from Italy’s UniCredit S.p.A. for six defence aircraft, which remains undisbursed; €883.45 million from China Development Bank for the Kaduna–Zaria rail project, with €245.19 million already disbursed; and a $449 million World Bank (IBRD) loan for power sector reforms, of which just $1.11 million has been released.

Additional facilities include loans from the International Development Association (IDA) for the Adolescent Girls Initiative for Learning and Empowerment (AGILE) and the Nigeria for Women Scale-Up Project, as well as a $3.56 million Islamic Development Bank facility for the i-DICE programme. Across these loans, disbursements remain relatively low despite sizeable commitments, reflecting a cautious release of funds tied to project execution and performance benchmarks.