The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government to ensure that the newly approved $500 million loan by the World Bank to Nigeria is transparently disbursed to small businesses and vulnerable communities as intended by the borrower.
In a statement issued by the Director-General of the LCCI, Dr. Chinyere Almona, the chamber acknowledged that the loan was given to Nigeria under the Community Action for Resilience and Economic Stimulus Program of the World Bank.
Dr Almona noted that the loan is aimed at supporting small businesses and vulnerable households who bear the brunt of the nation’s economic challenges.
“The Lagos Chamber of Commerce and Industry (LCCI) acknowledges the recent approval of a $500 million loan by the World Bank to Nigeria under the Community Action for Resilience and Economic Stimulus Program.
“This development comes at a crucial time as the nation grapples with mounting economic challenges, including inflationary pressures, declining purchasing power, and an increasingly burdensome debt profile.
“While this intervention is aimed at supporting poor and vulnerable households and firms, it is imperative that its broader implications on businesses and the economy pose a concern to the business community.”
LCCI’s demands
The chamber demanded a transparent disbursement of the funds to the intended beneficiaries, who are small businesses and vulnerable households.
It added that a “robust monitoring and evaluation framework should be established to track the impact of these funds and prevent misallocation.”
- It also urged the government to prioritize concessional financing and ensure borrowed funds support economically viable projects. It stressed that strengthening tax reforms and expanding the economy’s productive base can reduce dependence on external borrowing.
- LCCI noted that beyond short-term palliatives, the government must implement structural reforms that create a conducive business environment.
“Policies should focus on improving infrastructure, ensuring policy consistency, and addressing forex challenges to support private sector growth and attract investment.”
Concern over Nigeria’s rising debt
Dr Almona expressed concern over Nigeria’s rising debt, saying the World Bank loan is only a short-term stimulus.
She noted that the loan could boost food security and reduce economic hardship for many poor Nigerians, but urged the government to consider the long-term macroeconomic implications.
“The loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presents a potential short-term stimulus. It can enhance food security and community resilience, mitigating the effects of economic hardship at the grassroots level.
“However, the broader macroeconomic effects must be carefully considered. Nigeria’s rising debt burden is a growing concern, particularly given the slow pace of disbursement and implementation of previously approved loans.”
She said the mounting debt burden on Nigeria could weaken the confidence of potential investors in Nigeria and prevent the government from implementing long-term economic reforms.
“With the World Bank’s share of Nigeria’s external debt reaching $17.32 billion, the question of debt sustainability becomes increasingly pressing. If not efficiently managed, additional borrowing could exacerbate fiscal vulnerabilities, weaken investor confidence, and limit the government’s ability to execute long-term economic reforms.”
The DG stressed that the loan and other “stimulus programs can offer temporary relief”, but structural economic challenges such as inadequate infrastructure, multiple taxation, and forex volatility remain unaddressed.
The LCCI urged the government to address the issues of poor power supply, high cost of energy, and put a strategy in place for economic diversification for long-term economic growth.
