The Lagos Chamber of Commerce and Industry (LCCI) has outlined strategic approaches aimed at maximising the benefits of the $500 million loan by the World Bank to Nigeria while mitigating associated risks.
The Director General, LCCI, Dr Chinyere Almona, made this known on Tuesday in Lagos in reaction to the approval of the loan by the World Bank to the country.
Freedomonline reports that the fresh $500 million dollars loan was approved to support the country’s Community Action for Resilience and Economic Stimulus Programme.
According to Almona, the development comes at a crucial time as the nation grapples with mounting economic challenges notwithstanding an increasingly burdensome debt profile.
She noted that while the intervention aimed to support poor and vulnerable households and firms, its broader implications on businesses and the economy posed a concern.
The LCCI D-G said the loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presented a potential short-term stimulus.
She added that it could 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.
“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,” she said.
Almona said that to maximise the benefits of the loan while mitigating associated risks, there must be a transparent and efficient disbursement mechanism.
This, she said, would ensure that funds reach the intended beneficiaries, particularly small businesses and vulnerable communities.
She called for a robust monitoring and evaluation framework to track the impact of these funds and prevent misallocation.
Almona urged government to adopt a prudent debt management strategy that prioritised concessional financing and ensured that borrowed funds were tied to projects with clear economic returns.
She stressed that beyond short-term palliatives, government must implement structural reforms that create a conducive business environment.
According to her, policies should focus on improving infrastructure, ensuring policy consistency, and addressing foreign exchange challenges to support private sector growth and attract investment.
“The LCCI stands on the point that a more impactful stimulus for economic growth is that government solves the perennial problem of poor power supply and high cost of energy.
“While the world bank loan offers immediate relief, long-term economic resilience can only be achieved through a comprehensive strategy.
“This strategy must foster economic diversification, enhance productivity, and strengthen institutional frameworks for effective governance,” she said.
