The Lagos Chamber of Commerce and Industry (LCCI) has raised concerns over the recent approval of a $500m loan by the World Bank to Nigeria, urging the government to ensure transparency, accountability, and efficient utilisation of the funds.
The loan, granted under the Community Action for Resilience and Economic Stimulus (CARES) Program, is intended to support vulnerable households and businesses struggling amid the country’s ongoing economic challenges.
However, the LCCI warned that without prudent management, the loan could further exacerbate Nigeria’s growing debt burden.
In a statement issued by the Director General of LCCI, Dr. Chinyere Almona, and made available to THE WHISTLER, the Chamber acknowledged the potential short-term benefits of the loan in providing financial relief to struggling businesses and communities.
However, it emphasised the need for a well-structured disbursement mechanism to ensure that funds reach the intended beneficiaries.
“While this intervention aims to cushion the effects of economic hardship, its long-term impact depends on the government’s ability to implement transparent and effective fund allocation strategies,” Almona stated.
Nigeria’s external debt profile has been on a steady rise, with the World Bank’s share of the country’s debt reaching $17.32bn.
The LCCI expressed concerns that additional borrowing, if not properly managed, could weaken investor confidence, increase fiscal vulnerabilities, and limit the government’s ability to execute sustainable economic reforms.
The Chamber also noted that only 16 per cent of previously approved World Bank loans under the current administration have been disbursed, raising questions about Nigeria’s absorptive capacity and the risk of mismanagement.
Beyond concerns over debt sustainability, the LCCI highlighted structural economic challenges that persist despite financial aid.
Businesses in Nigeria continue to grapple with inadequate infrastructure, multiple taxation, and forex volatility, which significantly hinder private sector growth.
While the loan provides temporary relief, the Chamber stressed that long-term solutions must focus on improving the business environment, fostering investment, and addressing energy sector inefficiencies.
To maximise the benefits of the $500m loan, the LCCI recommended key strategic measures. It urged the government to establish a transparent and efficient disbursement framework, ensuring that funds directly reach small businesses and vulnerable communities.
Additionally, the Chamber called for a robust monitoring and evaluation system to track fund allocation and prevent potential mismanagement. Strengthening domestic revenue generation through tax reforms and economic diversification was also cited as crucial to reducing over-reliance on external borrowing.
Furthermore, the LCCI emphasised that sustainable economic growth hinges on policy consistency, improved infrastructure, and a stable macroeconomic environment.
The Chamber reiterated that addressing the perennial issues of poor power supply and high energy costs would have a more significant impact on economic resilience than continuous borrowing.
While the $500m World Bank loan offers immediate economic relief, the LCCI maintains that Nigeria’s long-term financial stability depends on prudent debt management and strategic economic planning.
It called on the government to implement policies that promote productivity, attract investment, and create employment opportunities, ensuring that financial interventions translate into sustainable economic growth.
