The Lagos Chamber of Commerce and Industry (LCCI) has called for a stable operating environment to effectively utilise the approval of a $500 million loan by the World Bank to Nigeria under the Community Action for Resilience and Economic Stimulus Program.
The director-general of LCCI, Dr. Chinyere Almona said 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. While this intervention is aimed at supporting poor and vulnerable households and firms, its broader implications on businesses and the economy must pose a concern to the business community.”
She noted that the loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presents a potential short-term stimulus, saying that 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.”
Almona emphasised that “from a business perspective, while targeted stimulus programs can offer temporary relief, structural economic challenges such as inadequate infrastructure, multiple taxation, and forex volatility remain unaddressed.
“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. There is also concern about the efficiency of fund allocation and utilization, given that only 16 per cent of previously approved World Bank loans under the current administration have been disbursed. This raises questions about the absorptive capacity of relevant institutions and the risk of funds being underutilised or mismanaged.”
To maximise the benefits of this loan while mitigating associated risks, LCCI stated that “there must be a transparent and efficient disbursement mechanism that ensures funds reach the intended beneficiaries, particularly small businesses and vulnerable communities.
“The government should adopt a prudent debt management strategy that prioritizes concessional financing and ensures that borrowed funds are tied to projects with clear economic returns. Beyond short-term palliatives, the government must 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.”
LCCI DG added, “The Chamber 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.”