To reinforce its procurement reform agenda and environmental compliance capacity, the Federal Government of Nigeria is in advanced negotiations with the World Bank for an additional $65 million loan. The funding, if approved, will augment the existing $80 million committed to the Sustainable Procurement, Environmental, and Social Standards Enhancement (SPESSE) Project, raising the total financing to $145 million.
According to a document obtained from the World Bank, the final approval for the additional financing is expected by June 30, 2025. The parent SPESSE project, which was initially approved in February 2020 and became operational in March 2021, was designed to overhaul Nigeria’s public procurement system while integrating sustainable environmental and social safeguards into national development frameworks.
The overarching goal of the SPESSE initiative is to develop sustainable capacity in managing procurement, environmental, and social (E&S) standards across both public and private sectors. The World Bank has reiterated that the additional financing will not alter the core development objective of the project.
So far, SPESSE has trained more than 33,000 professionals in procurement and E&S standards, helping to curb inefficiencies, reduce corruption in government contracting, and instill accountability in the disbursement and monitoring of public funds.
One of the major upcoming components of the project is the Electronic Government Procurement (e-GP) system, which the government expects to revolutionize how public tenders are managed. The system is geared to improve transparency, minimize procurement delays, and drive fiscal efficiency in project delivery.
The expanded funding will also emphasize inclusive procurement practices, giving greater opportunities to small and medium-sized enterprises (SMEs), especially women-led businesses, to participate in public tenders. It will also scale up certification programmes to address the growing shortage of qualified procurement officers across various government levels.
A demand assessment cited by the World Bank revealed that over 25,000 government officials still require formal training in procurement and E&S protocols. The new loan aims to fill this capacity gap and promote institutional reform.
On the environmental side, the funding will support the strengthening of Nigeria’s safeguards policies to meet international standards, especially in infrastructure, agriculture, and mining sectors where social and environmental risks are high.
However, the additional borrowing comes amid concerns about Nigeria’s rising external debt, especially to multilateral lenders. Data from the Debt Management Office (DMO) show that Nigeria’s total debt to the World Bank rose by $2.36 billion in 2024, from $15.45 billion in 2023 to $17.81 billion by December 2024. This represents 38.9% of Nigeria’s total external debt stock, which stood at $45.78 billion at the end of 2024.
Within the multilateral lending category, the World Bank now accounts for 79.8% of Nigeria’s total multilateral debt, making it the country’s largest single source of development financing.
The parent SPESSE project is expected to close by June 30, 2026, while the new financing, if approved, will have a longer timeline, closing by June 30, 2029, according to the World Bank.
With Nigeria currently grappling with fiscal instability, rising poverty, and governance challenges, analysts believe that sustainable procurement reforms are crucial for delivering public projects that are transparent, cost-effective, and socially responsible. The expansion of SPESSE through the $65 million loan is viewed as a long-term investment in Nigeria’s institutional capacity.
Experts warn, however, that safeguards must be in place to ensure that funds are not diverted or lost to inefficiencies. Civil society groups and procurement monitors have called for increased public oversight and stakeholder engagement in the rollout of the e-GP platform and training modules.
As Nigeria awaits final approval from the World Bank by the end of June, the additional funding could serve as a pivotal tool in institutionalizing reforms that could outlive political cycles and serve future generations.