Nigeria risks wasting World Bank loans without lasting reforms — Hassan

By: Amarachi Okonkwo 

The National Coordinator of the World Bank-backed HOPE Governance Programme, Assad Hassan, has called on federal and state governments to maximise the benefits of concessional financing by embedding reforms within durable institutional frameworks, warning that Nigeria risks a repeat of failed reform cycles if lessons from past programmes are not applied.

Hassan made this known on Tuesday in Enugu during the South-East Implementation Support Mission of the programme convened by the World Bank. His remarks underscore growing concerns among development partners over the sustainability of reforms tied to externally funded initiatives.

According to a statement issued by the programme’s Communications Officer, Joe Mutah, Hassan stressed that while concessional and soft loans provide critical fiscal space, the responsibility for sustaining reforms ultimately rests with government institutions at both federal and subnational levels.

He noted that Nigeria has historically struggled to maintain reform momentum once funding cycles end, citing the State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme as a key example.

“Inasmuch as the Bank is a significant partner and provides concessional financing, the onus is on us to ensure that these programmes are sustained beyond their lifecycle,” Hassan said. “We must ask ourselves what becomes of these reforms after the funding ends.”

The HOPE Governance Programme is designed to strengthen institutional capacity in basic education and primary healthcare, with a focus on improving service delivery outcomes at the state level. It adopts a results-based financing model, linking disbursements to measurable performance indicators.

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Hassan emphasised that the long-term success of the initiative will depend on the ability of state governments to translate financial inflows into structural changes that outlast external support. He added that demonstrating reform ownership is critical for maintaining credibility with international partners and attracting future funding.

Nigeria’s growing exposure to multilateral financing adds urgency to these concerns. As of December 31, 2025, the country’s debt to the World Bank’s International Development Association (IDA) stood at $18.7bn, representing an 11.3 per cent increase from $16.8bn in 2024. This positions Nigeria as the third-largest borrower in the IDA portfolio, behind Bangladesh and Pakistan.

Also speaking at the event, the World Bank’s Task Team Lead for the programme, Ikechukwu Nweje, said the adoption of the Programme-for-Results (PforR) model was deliberate, aimed at ensuring accountability and measurable impact.

“The PforR framework supports states in building workforce capacity and institutional systems necessary to sustain reform objectives,” Nweje said, adding that the Bank will continue to provide technical assistance alongside financial support.

He disclosed that the national coordination unit would deploy consultants to participating states to strengthen implementation and improve outcomes across key sectors.

Hassan further commended the Enugu State Government for progress made in reforming education and healthcare administration, noting that such efforts demonstrate the potential of the programme when backed by political will and effective execution.

The implementation support mission, which brought together officials from across the South-East, was declared open by the Secretary to the State Government, Chidiebere Onyia, representing Governor Peter Mbah.

Nigeria has long relied on concessional loans from multilateral institutions to drive public sector reforms, particularly in critical areas such as education and healthcare. While these facilities typically offer low interest rates and favourable repayment terms, sustainability has remained a persistent challenge.

Analysts note that the HOPE Governance Programme represents a strategic shift toward performance-based funding, aimed at addressing past shortcomings by tying financial support directly to verifiable outcomes.

However, Hassan’s warning reinforces a broader concern within the development community: without strong institutions, accountability mechanisms, and sustained political commitment, even well-funded programmes may struggle to deliver lasting economic and social impact.