The Lagos Chamber of Commerce and Industry (LCCI), has called for a transparent and efficient disbursement mechanism of the fresh $500 million World Bank loan to ensure funds reach the intended beneficiaries, particularly small businesses and vulnerable communities.
The chamber stated that a robust monitoring and evaluation framework should be established to track the impact of these funds and prevent misallocation.
The World Bank recently approved a $500 million loan to Nigeria under the community action for resilience and economic stimulus program.
The chamber noted that 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.
Chinyere Almona, director general of LCCI, said that 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.
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Almona said that 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,” Almona said.
The chamber said that, 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 LCCI noted.
The LCCI also said that the government should adopt a prudent debt management strategy that prioritises concessional financing and ensures that borrowed funds are tied to projects with clear economic returns.
“Strengthening domestic revenue generation through tax reforms and expanding the productive base of the economy can reduce reliance on external borrowing.
“Businesses require a stable operating environment, and while social welfare programs are essential, they must be complemented by policies that foster productivity, investment, and job creation,” the LCCI said.
Beyond short-term palliatives, the LCCI urges the government to 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.
The LCCI stands on the point that a more impactful stimulus for economic growth is that the government solves the perennial problem of poor power supply and high cost of energy and creates an enabling business environment where small businesses can thrive, creating jobs and generating revenues for the government.
“While the World Bank loan offers immediate relief, long-term economic resilience can only be achieved through a comprehensive strategy that fosters economic diversification, enhances productivity, and strengthens institutional frameworks for effective governance,” the chamber noted.
