World Bank Halts $700M Loan to Nigeria Amid Controversy over Water Bill

World Bank Group

World Bank Halts $700M Loan to Nigeria Amid Controversy over Water Bill

A $700 million World Bank loan for a Rural Water Supply and Sanitation Project in Nigeria has been put on hold due to legislative gridlock.

The Sustainable Urban and Rural Water Supply, Sanitation and Hygiene Program-for-Results (SURWASH), is crucial for improving water access for millions of Nigerians.

The project is part of Nigeria’s efforts to meet the United Nations’ Sustainable Development Goals.

According to the report, the heart of the issue lies in the stalled passage of the contentious water bill, essential for unlocking further funds from the loan aimed at enhancing water, sanitation, and hygiene services across the country.

So far, only about 12% of the loan amounting to $80.35 million has been disbursed to Nigeria, with a remaining $577.33 million awaiting the fulfilment of certain conditions tied to the loan project.

Despite the project’s forward movement, with Programme Year 2 results submitted on January 13, 2024, and currently under review by an Independent Verification Agent, the delay in legislative action is a stumbling block.

Recall that the SURWASH Programme was initiated with a development objective to expand access to water and sanitation services while fortifying sector institutions.

The execution of the SURWASH Program, which saw approval on May 25, 2021, and is expected to close by June 30, 2027, is notably contingent on specific Disbursement Linked Indicators (DLIs).

A pivotal DLI is the establishment of the National WASH Fund (DLI1), envisioned within the water bill introduced during Muhammadu Buhari’s presidency.

The failure to pass this bill before the political transition in May 2023 threatens to delay the establishment of the National WASH Fund, consequently impacting the release of the World Bank’s loan.

According to the document from the World Bank, “The push to get the water bill passed by the National Assembly (NASS) before the political transition which happened in May 2023 did not materialize.

“This may result in a delay in establishing the National WASH fund as it is part of the proposed water bill. DLI 1 under the SURWASH Program is related to the National WASH Fund, so disbursements will be impacted.

“The Ministry plans to review and present again to the new National Assembly the bill after holding stakeholder consultative fora across the country.”

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