Failed Water Projects: Nigeria To Pay W/Bank $6.25m Yearly For 40 Years

Nigeria is set to repay $6.25 million annually over the next 40 years, totalling more than $250 million, excluding interest, for a World Bank loan meant to improve water access in Ekiti, Bauchi, and Rivers states, despite negligible results, a new report has revealed.

Approved in 2015, the Third National Urban Water Sector Reform Programme (NUWSRP3) was scheduled to run until 2020, backed by a $250 million loan from the International Development Association (IDA) with a 40-year repayment term. However, the project mirrored earlier failed initiatives, prompting doubts about its viability from the outset.

The programme aimed to rehabilitate and expand water infrastructure in the three states, with each receiving between $50 million and $80 million, plus an additional $20 million contingent on performance indicators. Access to funds was tied to strict conditions, including the establishment of State Project Implementation Units (SPIUs), adoption of financial management systems, and adherence to procurement and transparency standards.

Although the Federal Government of Nigeria (FGN) is the official borrower, loan repayments are deducted from state allocations via the Federation Account Allocation Committee (FAAC), making repayment especially burdensome given the project’s failure to deliver meaningful outcomes.

The report, Big Debt, Big Thirst: A Case Study of World Bank-Supported Water Projects in Ekiti, Rivers, and Bauchi States, published by Corporate Accountability and Public Participation Africa (CAPPA), exposes a funding model that prioritises privatisation over public access.

Despite the conditions attached, NUWSRP3 failed to produce lasting improvements. In Rivers State, the World Bank disbursed $30 million before withdrawing due to clashes with a separate $200 million loan from the African Development Bank. The state remains liable for repayment despite the project’s collapse.

In Ekiti and Bauchi, significant infrastructure investments were made, but chronic electricity shortages rendered many facilities non-functional. At Ero Dam in Ekiti, engineers confirmed the system requires a stable power supply—something the state cannot guarantee. In Bauchi, broken pipes have led to water contamination, with many residents relying on private water vendors who charge anywhere from ₦500 to ₦40,000 monthly, depending on location and income.

CAPPA’s investigation further revealed a lack of transparency in loan administration. Attempts to obtain information from the Ministry of Finance and the World Bank were met with resistance, while civil servants hesitated to speak for fear of reprisals.

Sefa Ikpa, programme officer for CAPPA’s Water Campaign, noted that billions in loans have flowed into Nigeria’s water sector, yet access to clean water remains elusive for millions. “The report questions whether the World Bank’s investments align with its stated goals of poverty reduction and improved living standards,” Ikpa said.

He noted that previous funding tranches—starting with a $200 million investment in Kaduna, Ogun, and Enugu—were deemed “moderately unsatisfactory” by the Bank’s own evaluations. “Rather than reassess its approach, the Bank continued replicating the same flawed model in Lagos, Cross River, Ekiti, Bauchi, and Rivers.”

As Nigeria continues repaying these loans, Ikpa called for a fundamental rethink. “These are debts, not grants. Without a shift that prioritises access over profit, the cycle of debt will persist while basic needs go unmet.”

Professor Adelaja Odutola Odukoya, Dean of Social Sciences at the University of Lagos, argued that the World Bank’s role in Africa sustains dependency rather than development. He described the Bank as the “West Bank” or even the “worst bank”, accusing it of exploitative lending practices that favour Western interests while indebting African nations.

“We’re made to believe we’re partners in development. That’s a lie. Every dollar we borrow barely reaches us. The capital, technology, and interest payments all go back to the lender. That’s why failure is built into the system—so we keep borrowing,” Odukoya said.

He also accused the local elite of colluding with the Bank, acting as “commission agents” who facilitate loans for personal gain while the public bears the long-term cost.

“Loan upon loan, debt upon debt—yet development is never the goal. Nigeria has become an ATM for Western capital,” he said.

Odukoya criticised the Bank’s emphasis on privatisation, arguing that it prioritises corporate profit over public welfare.

“Privatisation doesn’t improve efficiency; it restricts access. It’s about profit, not people.”

He also dismissed the Bank’s self-assessment as “moderately unsatisfactory” as deliberately vague.

“It’s either satisfactory or not. There’s no middle ground. This is politics masquerading as development,” he stated.

Further criticising the opaque nature of loan agreements, he added: “Africans are excluded from key decisions. We’re only left with the debt.”

Calling for a re-evaluation of the continent’s relationship with the institution, he said: “Isn’t it time we wrote the obituary of the World Bank in Africa? It will never develop us.”

Zikora Ibeh, assistant director at CAPPA, questioned why the Bank continues to lend despite repeated failures. “It’s either incompetence or by design—to maintain financial control,” she said. “Projects are structured to fail due to unrealistic conditions, yet the debt remains. For instance, a 40-year loan was cancelled in its second year, but Nigeria must still repay it.”

She noted that broader economic policies pushed by the Bank—including currency devaluation, deregulation, and fuel subsidy removal—have worsened economic hardship, further complicating debt repayment.

Ibeh added that water sector reforms pushed by the Bank consistently favour profit-driven models over public interest. In Lagos, proposals to expand water access relied on unaffordable tariffs. In Bauchi, authorities resisted tariff hikes imposed by loan conditions, knowing they were unfeasible. Nevertheless, the World Bank insists on restructuring public water boards into private entities, paving the way for corporate control.

Ironically, residents report that the last time they had reliable access to clean water was in the 1990s, under state-run systems that treated water as a public good.

In 2021, a $700 million loan was approved for water projects, but only $80 million was released. The rest remains withheld because Nigeria has not passed the contentious National Water Resources Bill, which would require licences to access natural water sources—effectively transferring control to private hands.

Ibeh argued this exemplifies the Bank’s true aim: not water provision but long-term economic control. She urged Nigeria to declare a national emergency on water access, reject privatisation, and invest in sustainable, publicly managed infrastructure.

Oluwafemi Akinbode, CAPPA’s executive director, strongly condemned ongoing water privatisation efforts, warning they have deepened socio-economic inequality and denied millions access to a basic necessity. “Privatisation has failed across multiple states, yet the government clings to it—despite evidence, including the Bank’s own assessments, that it doesn’t work.”

Akinbode said water is not just a utility but a fundamental human right tied to public health and social equity. He called for an immediate end to privatisation, increased budgetary allocations, and reinvestment of natural resource revenues into water infrastructure.

He also advocated for robust regulation and a departure from market-led policies imposed by global lenders.

“Water access must serve the people—not profit margin,” he said.