Nigeria and the World Bank

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The World Bank is an institution that was established in 1944 and since 1958 has provided Nigeria with low interest rate loans and grants through the International Development Association(IDA) and International Bank for Reconstruction and Development (IBRD). [1] As of 2018, it consists of 189 member countries. Its primary goal was to help and rebuild countries after the World War 2. But now, its goal is to eradicate poverty in every member country. After her independence in 1960, Nigeria officially joined the World Bank on March 30, 1961. [2] As the World Bank's goals and outreach in different countries have diversified, they have gradually over the years organized the bank into five agencies to tackle specific issues in low and middle-income countries. Since then, Nigeria has partnered up with the IDA, specifically built to help low income countries and give out loans for very low interest rates, and the IBRD.

Contents

History

Nigeria is currently the most populated country in Africa and it is also the biggest oil exporter and in addition to this, it has the second biggest economy in Africa. All of these qualities make it a country with great economic potential, but Nigeria also faces great development challenges. [3] It was not until 1999 that a democratic regime finally took over Nigeria under President Olusegun Obasanjo. From there on relations with the World Bank and Nigeria flourished. The World Bank has been working with Nigeria to reduce the high rate of poverty, create better human capital, diversify the country's revenue through non-oil sectors, and help with economic management. Up until 2004, the World Bank was slow to release funds and most projects were relatively going slow and have proved unsatisfactory. Through 2000 to 2007 the World Bank was set on making reforms in macro stability and governance. According to the World Bank evaluations, this was classified as being moderately satisfactory. The other pillars that were focused on were social service delivery, community empowerment, and creating a basis for non-oil growth. These all proved to be moderately unsatisfactory according to the World Bank evaluation. [4] Although change was slow, by 2007 better results started to come from the projects in Nigeria. In 2016, Nigeria ranked as the 12th highest loan recipient from the World Bank with 6.6 billion dollars. [5] As of 2018, the World Bank has a total of 31 projects in 772 locations in Nigeria. This all adds up to $9.21 billion worth of programs in sectors of like social protection, health, agriculture, fishing, forestry, energy, public administration and other areas in need of refinement. [6] By 2018 the World Bank has approved over 225 projects in Nigeria since 1958, most of which happened through IDA credits and IBRD loans. [7]

World Bank Success in Nigeria

Despite the risks that are associated with most projects, they are carried out by the World Bank and Nigeria with the intention of making the country's infrastructure better. Some have proven to not be successful, but many others have been successful and changed the lives of Nigeria's inhabitants. The World Bank has made progress in many areas like, urban and rural development, energy production, agriculture, etc... [8] The Rural Access and Mobility Project (RAMP) is one of the World Bank's successful projects. This project's aim was to build and rebuild roads to ameliorate social conditions and bring business in certain communities. Since 2008, 150 new river crossings and over 464 kilometers of rural road has been built or improved. This resulted in children finally being able to go to school during the rainy seasons. In addition to this, 4.6 million tons of agricultural produce has been transported compared to the previous amount of 3.5 million tons. It also led to a decrease in cost of transportation and an increase in population in the area; which is still increasing up to this date. Through this period, new small and medium business like fishing farms, poultry farms, sawmills, and new markets submerged alongside these roads. [9] Another successful project was the Nigeria National Energy Development Project (NEPD). It started in 2005 and by the closing of this project in 2012, they manage to deliver more efficient energy to 4.4 million consumers in Nigeria. They connected 40 communities and over 24,600 household all over the country with 8,100 meters of grid. [10] The National Fadana Project has been so successful that it was renewed a second and third time with a slightly different focus each time to keep improving farmers situations while staying on the path of Nigeria's Agricultural Transformation agenda. It is a project that has been active since 1993 and is still going on as of 2018. Over time it has turned the act of farming into a profitable business and has groomed farmers to be “Agro-preneurs”. It has also reduced the level of poverty in areas it was established in. [11]

Recent focus

Although there has been progress through recent projects in Nigeria, more needs to be done to bring the country up to speed. In July 2018, The World Bank decided to extend its Country Partnership Strategy with Nigeria until June 30, 2019. In doing so, 7 new projects worth $2.1 billion were approved to start in Nigeria. These projects will be carried out through multiple IDA credits. The main focus of these projects is on key sectors that will lead to economic growth and stability in the upcoming years alongside the Economic Recovery and Growth Plan (ERGP). [12] Through this, the already existing Nigeria Erosion and Watershed Management Project (NEWMAP) was also funded with $400 million to reduce and work against soil and gully erosion and land degradation in several states across Nigeria. NEWMAP was created by the World Bank and Federal Ministry of Environment after president Goodluck Jonathan asked the World Bank to intervene and help with the erosion in Southeastern Nigeria and land degradation in the North. [13]

Sub national/central government

$750 million has been released toward the State Fiscal Transparency, Accountability and Sustainability Project and $125 million towards the Fiscal Governance and Institutions Project. These two projects will work together in order to strengthen the fiscal transparency and make national statistic records and public finance credible. This will result in a boost in trust of the government. Through these projects they will make sure to properly oversee that resources towards services such as education, health, and water are being properly allocated. These PforR (Program for Result) projects approved on July 27, 2018, will continue until December 2022. [14]

Human development: health and gender

A total of $232 million will be allocated toward The Accelerating Nutrition Results in Nigeria Project. $225 million coming from IDA credits and the other 7 million as a grant from the Global Financing Facility. This project is set to close in December 2023. [15] In Nigeria, Malnutrition rates since 2008 have not changed on a large scale. They have had a history of long-term malnutrition that is spread out unevenly across Nigeria. Malnutrition is affecting about 44% percent of children under the age of five. Putting them at risk of not developing to their fullest potential or at risk of dying. This project is aimed toward pregnant women, adolescent girls, and children under the age of five. It will benefit over 8.7 million people. [16] $150 million IDA credits is being put toward the Nigeria Polio Eradication Support Project part of the effort to eradicate polio worldwide. This project will bring oral polio immunizations to at least 80% national target in each Nigerian states participating. This will help reduce infant mortality and lessen risks of polio in both adults and children. [17] The Nigeria women project is targeting women over the age of 18 and will directly benefit a total of 324,000 women all across Nigeria, motivating them to become members of Women Affinity Groups (WAG) that will bring about proper training and skill enhancements that will introduce more women into the Nigerian economic sector. This project focuses on women economic empowerment and paves a way for their voices to be heard. This is the first World Bank project in Nigeria to focus mainly on one specific gender. It is funded through $100 million credit from the IDA. [18]

Energy

The Nigeria Electrification Project (NEP) is being financed through $350 million IDA credits from the World Bank. The goal is to be able to provide long-term and reliable electricity to households, small and medium enterprises, universities, and teaching hospital through solar hybrid mini grids and stand-alone solar systems. [19] The North Core/Dorsale Nord Regional Power Inter-connector Project was approved in 2018 as a joint project that will not only help Nigeria, but also Benin, Burkina Faso and Niger. Connecting these four countries to high voltage transmission lines will enable to take part in an effective regional energy trade. The World Bank has committed $465.5 million towards this project. $275.6 million came in the form of credit and the rest as a grant from the IDA. As a result, this project will bring more reliable and affordable electricity to households and businesses. Therefore, creating competition in businesses that will help business grow and create jobs and help the economy in each sovereign state. [20]

Related Research Articles

The International Bank for Reconstruction and Development (IBRD) is an international financial institution, established in 1944 and headquartered in Washington, D.C., United States, that is the lending arm of World Bank Group. The IBRD offers loans to middle-income developing countries. The IBRD is the first of five member institutions that compose the World Bank Group. The initial mission of the IBRD in 1944, was to finance the reconstruction of European nations devastated by World War II. The IBRD and its concessional lending arm, the International Development Association (IDA), are collectively known as the World Bank as they share the same leadership and staff.

<span class="mw-page-title-main">World Bank Group</span> Group making loans to developing countries

The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development Group. The bank is headquartered in Washington, D.C. in the United States. It provided around $98.83 billion in loans and assistance to "developing" and transition countries in the 2021 fiscal year. The bank's stated mission is to achieve the twin goals of ending extreme poverty and building shared prosperity. Total lending as of 2015 for the last 10 years through Development Policy Financing was approximately $117 billion. Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). The first two are sometimes collectively referred to as the World Bank.

The International Development Association (IDA) is an development finance institution which offers concessional loans and grants to the world's poorest developing countries. The IDA is a member of the World Bank Group and is headquartered in Washington, D.C. in the United States. It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income, from troubled creditworthiness, or from the lowest per capita income. Together, the International Development Association and International Bank for Reconstruction and Development are collectively generally known as the World Bank, as they follow the same executive leadership and operate with the same staff.

<span class="mw-page-title-main">World Bank</span> International financial institution

The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), two of five international organizations owned by the World Bank Group. It was established along with the International Monetary Fund at the 1944 Bretton Woods Conference. After a slow start, its first loan was to France in 1947. In the 1970s, it focused on loans to developing world countries, shifting away from that mission in the 1980s. For the last 30 years, it has included NGOs and environmental groups in its loan portfolio. Its loan strategy is influenced by the United Nations' Sustainable Development Goals, as well as environmental and social safeguards.

<span class="mw-page-title-main">China and the World Bank</span> Overview of the relationship between China and the World Bank

China originally joined the World Bank Group (WBG) on December 27, 1945. However, after the Chinese Civil War, the World Bank recognized the Republic of China as its member, until the relationship ended in 1980, when the membership was replaced by the People's Republic of China. The People's Republic of China (PRC) did not become involved with the World Bank group until 1980, when it first joined the World Bank in April due to the market reforms known as reform and opening-up. Prior to the economic reform and its relation with the World Bank, according to CRS, "China maintained policies that kept the economy very poor, stagnant, centrally controlled, vastly inefficient, and relatively isolated from the global economy". Since its entry into the World Bank, China has transformed into a market-based economy and has experienced rapid economic and social development. Currently, although China has become the world's second largest economy with 1.4 billion population, it still has a close relationship with the World Bank in areas such as poverty, environmental protection and new challenges from the reform.

<span class="mw-page-title-main">Honduras and the World Bank</span>

The World Bank Group is a family of five international organizations that has provided leveraged loans and monetary assistance to the Central American country of Honduras in order to assist with the funding of critical tasks needed to ensure security of Honduran access to financing, expansion of social program coverage, and rural development. The country is the second poorest in Central America and its high poverty rate of 66% in 2016 has prompted an increased focus on the importance of diversification of rural income sources, quality education, and targeted social programs as a way of spurring economic growth.

Sri Lanka has been involved with the World Bank since its initial entrance into the International Bank for Reconstruction and Development (IBRD) on August 29, 1950. Currently, Sri Lanka's quota in the IBERT is approximately 515.4 million dollars, thus allotting 5,846 votes or 0.25% of the total votes in the institution. Sri Lanka later became a member of the other institutions in the world bank such as the International Finance Corporation (IFC) on July 20, 1956, with a current quota of 7.491 million dollars, allotting 8,311 votes or 0.32% of the total votes; the International Development Association (IDA) on June 27, 1961, with a current share of 98,100 votes or 0.36% within the institution; the International Center for Settlement of Investment Disputes (ICSID) on November 11, 1967; and the Multilateral Investment Guarantee Agency (MIGA) on May 27, 1988, with a current quota of 4.78 million SDR. Sri Lanka is currently in the India-led constituency for these organizations, representing the country as part of the South Asian block.

The World Bank Group country partnership framework aims to support Haiti's efforts to reduce poverty and provide economic opportunities for all Haitians. The framework aims to strengthen institutions, government capacity, and public financial management as aid and concessional financing rapidly decline.

Morocco's involvement with the World Bank primarily focuses on infrastructure, such as road, transport and water sanitation. In addition the bank supports projects across the health sector, youth development, renewable energy, governance and the support of small and medium enterprises (SMEs). 27 projects are ongoing, including three projects initiated in 2017. The World Bank invested over US$1 billion every year from 2014 to 2016.

Uzbekistan became a World Bank member in 1992, shortly after declaring independence in 1991 following the collapse of the Soviet Union. The World Bank has supported projects in Uzbekistan in the areas of education, infrastructure, agriculture, and water resource management. Uzbekistan's collaboration with the bank has been increasing, with IBRD and IDA lending reaching a recent peak of $500 million in 2015. The World Bank has provided financing for 27 projects through the IBRD and IDA in throughout its relationship with Uzbekistan, with 15 active projects as of June 2017. Current IBRD and IDA projects total $1.9 billion.

<span class="mw-page-title-main">Uruguay and the World Bank</span>

Uruguay and the World Bank have been working together for a long time. This is because they both mutually benefit.

<span class="mw-page-title-main">Vietnam and the World Bank</span> Vietnams relationship with the World Bank

Vietnam joined the World Bank Group (WBG) on 21 September 1956. Before the mid-1980s, Vietnam was one of the world's least developed countries. A series of economic and political reforms launched in 1986, known as Đổi Mới, caused Vietnam to experience rapid economic growth and development, becoming a lower middle-income country. The World Bank (WB) has maintained a development partnership with Vietnam since 1993. As of 25 March 2019, it has committed a total of US$24 billion in loans, credits, and grants to Vietnam through 165 operations and projects, 44 of which are active as of 2019 and comprise US$9 billion. With an estimated extreme poverty rate below 3% and a GDP growth rate of 7.1% in 2018, Vietnam's economy continues to show fundamental strength and is supported by robust domestic demand and export-oriented manufacturing.

<span class="mw-page-title-main">Croatia and the World Bank</span>

Croatia joined the World Bank in 1993, two years after declaring independence from the Socialist Federal Republic of Yugoslavia in 1991. The World Bank's projects from the mid-1990s to the mid-2000s primarily focused on infrastructural and environmental projects.

<span class="mw-page-title-main">Democratic Republic of the Congo and the World Bank</span> The DRCs relations with the World Bank

The World Bank Group is a family of five international organizations, which has continuously given leverage loans and financial assistance to developing nations like the Democratic Republic of the Congo, commonly known as the DRC. The country has received assistance from the World Bank in the form of social programs in order to induce and sustain economic development. This assistance has been directed toward conflict prevention, investments in education, and addressing environmental degradation.

<span class="mw-page-title-main">South Korea and the World Bank</span>

South Korea first joined the World Bank Group as a member in 1955. Over the years, South Korea manages to develop its economy in a successful and positive manner. The country now is a financial contributor to the World Bank to help other, rather than an aid recipient in the old days. Under the help and cooperation with the World Bank, South Korea became a rapid growth country in economy begin in the 1970s, and it now became a large shareholder of the institution to help out other developing countries.

The Philippines' history with the World Bank started in 1945 when they became one of the first members of the International Bank for Reconstruction and Development (IBRD). Their first project with the Bank came in 1957 with the Binga Power Project. Since then, the Philippines has received $2.14 billion of disbursed loans from the IBRD. The Philippines is in the constituency entitled EDS 15, comprising Brazil, Colombia, Dominican Republic, Ecuador, Haiti, Panama, Suriname, and Trinidad and Tobago, and headed by Executive Director Fabio Kanczuk.

Japan joined the World Bank Group in August 1952. Loans that were taken out by Japan focused on improving infrastructure, having electrical power generation, improving water, establishing basic industry development and improving transportation. Japan now is the second-largest creditor to the World Bank, and in 1970 established an office in Tokyo.

<span class="mw-page-title-main">Malaysia and the World Bank</span>

Malaysia's independence in 1957 was a catalyst for growth. As the nation took charge of managing its own affairs, it continued to develop the goals and means necessary for a financial structure conducive to the economic growth observed today. Critical to the transition of Malaysia from a low-income country to one of high-income status has been the expansion of its economy. From a commodity and agricultural-based economy, the Southeast Asian nation is transitioning to a leading exporter of more complex goods. As the nation opens up to trade and investment, the World Bank and the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) continue to assist with its development.

The World Bank, in seeking to promote development within less developed countries, describes itself as a fund rather than a Bank, by initiating projects for less developed countries in pursuit to end poverty. The World Bank initiates and divides such projects for each Developed country through its 5 internal Institutions: that being MIGA, IDA, IFC, ICSID, and IRD. One target Latin American country was Guatemala. According to recent World Bank data, 8.7% of Guatemala's people met the standard of extreme poverty. This standard is quantified to mean an average income of less than $1.9 a day. Such poverty thus increasingly grew by "half a million" from the time of 2000–2014 With increasingly high poverty and a lack thereof appropriate education in 2016 prompted the World Bank partnership with Guatemala through the partnership.

<span class="mw-page-title-main">Belarus and the World Bank</span>

The World Bank Group is a large international financial institution that continuously provides loans and grants in order to fund capital projects in poor and developing nations across the globe. Its main goal is to reduce poverty worldwide. It consists of five other large international financial banks within in, each providing funding for different types of projects. Belarus joined the World Bank back in 1992 and has since then received over $2.5 billion in lending commitments since then and in the form of grant financing, it has received $31 million, with much of this funding going towards programs that include civil society partners. Currently, Belarus's active portfolio within the World Bank has a total of $933 million, with it containing a total of nine different projects, as well as two more projects that are currently still in preparation in the areas of energy efficiency and higher education. The majority of this funding has been directed towards the themes of pollution management and environmental health, climate change, and rural services and infrastructures, with the majority of the funding going directly into the central government, other agencies and extractives, and forestry sectors of the country, as well as sustainable energy. In looking to have more economic growth, improving the private sector environment within Belarus could help.

References

  1. ↑ "Nigeria". World Bank. Retrieved 2018-12-07.
  2. ↑ "Member Countries". World Bank. Retrieved 2018-12-07.
  3. ↑ "Document of the World Bank" (PDF).
  4. ↑ "Nigeria Country Assistance Evaluation" (PDF).
  5. ↑ "Countries ranked by IBRD loans and IDA credits (DOD, current US$)". www.indexmundi.com. Retrieved 2018-12-07.
  6. ↑ "Global Reach Map". maps.worldbank.org. Retrieved 2018-12-07.
  7. ↑ "Projects & Operations - All Projects | The World Bank". projects.worldbank.org. Retrieved 2018-12-07.
  8. ↑ "Nigeria". World Bank. Retrieved 2018-12-10.
  9. ↑ "Improved Access Roads Change Social and Business Dynamics in Nigeria's Kaduna State". World Bank. Retrieved 2018-12-10.
  10. ↑ "Enhancing Energy Production and Delivery". World Bank. Retrieved 2018-12-10.
  11. ↑ "Fadama Project Turns Nigerian Farmers into Agro-preneurs". World Bank. Retrieved 2018-12-10.
  12. ↑ "Nigeria: World Bank Ramps Up Support for Human Capital, Governance, Energy, and Climate Change". World Bank. Retrieved 2018-12-07.
  13. ↑ "About Us – NEWMAP" . Retrieved 2018-12-07.
  14. ↑ "The World Bank State Fiscal Transparency" (PDF). documents.worldbank.org.
  15. ↑ "Projects : Nigeria- Accelerating Nutrition Results | The World Bank". projects.worldbank.org. Retrieved 2018-12-07.
  16. ↑ "Document of the World Bank:Nutrition" (PDF).
  17. ↑ "Document of the World Bank:Polio" (PDF).
  18. ↑ "Document of the World Bank:Women" (PDF).
  19. ↑ "The Nigeria Electrification Project (NEP)". REA. 2018-07-17. Retrieved 2018-12-07.
  20. ↑ "World Bank Provides Support to Help Improve Energy Trade between Benin, Burkina Faso, Niger and Nigeria". World Bank. Retrieved 2018-12-07.
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