ANALYSIS: The $6.8m Trial of CBN Before the World Bank

By Lawal Dahiru Mamman,

In Nigeria, where trust between government and citizens remains as wide as the horizon, it is no surprise that the World Bank’s decision to reduce its planned grant to the Central Bank of Nigeria (CBN) from $10.5 million to $6.8 million has naturally raised eyebrows.

While the headline figure typically suggests a setback, especially for those who rarely read beyond headlines, the underlying reality is far less troubling and potentially even constructive.

In April 2025, the World Bank listed the “CBN Technical Assistance Facility” project at the concept review stage.

The proposal was for a $10.5 million grant aimed at strengthening the apex bank’s technology, enabling data-driven supervision of the banking sector, improving oversight of domestic payment and remittance systems, tackling long-standing issues such as fraud, weak compliance, and systemic vulnerabilities in financial operations, and supporting financial stability by enhancing resilience in Africa’s largest economy, where digital payments and remittances are increasingly vital.

The grant is to be financed entirely through the Finance for Development Multi-Donor Trust Fund, a partnership between the World Bank and multiple donors to support development projects, particularly in areas such as financial inclusion, education, and infrastructure — especially in developing countries — not through the World Bank’s loan arms, the International Development Association (IDA) or the International Bank for Reconstruction and Development (IBRD).

Early reports indicated that the World Bank Board was expected to consider the project by June 2025. This was the first formal timeline associated with the grant proposal. For reasons not publicly clarified, this did not occur. Recently, however, the grant was reduced, and the project reportedly advanced to the decision meeting stage, the final internal step before Board approval.

To clear the air, the grant remains exactly that — a grant, not a loan. In a country where debt is often incurred without citizens feeling its impact, and where sustainability remains a pressing concern, this distinction matters. Nigeria will not be saddled with additional repayment obligations.

Instead, the funds will be directed toward strengthening the CBN’s supervisory capacity, integrating advanced tools and data science into oversight of the banking sector and remittance systems.

Second, a smaller envelope often forces sharper focus. With $6.8 million, the CBN must prioritise the most impactful reforms, with special attention to those that deliver measurable improvements in transparency, compliance, and resilience. In this sense, the cut could serve as a form of discipline, ensuring resources are not spread too thinly across less critical initiatives.

Of course, the reduction carries costs. A $3.7 million shortfall means fewer resources to deploy cutting-edge technology or expand training programmes. It also risks sending a symbolic message of diminished confidence in Nigeria’s financial management capacity, even if the World Bank insists such adjustments are routine. In a sector where fraud, weak compliance, and remittance leakages remain real threats, every dollar of technical assistance counts.

Nigeria’s debt profile shows why this grant should not be a source of alarm. The World Bank already accounts for 41.3 percent of Nigeria’s external debt — $19.39 billion in total. Between 2023 and 2025 alone, loans from the Bank are projected to reach $9.65 billion. Against this backdrop, the $6.8 million grant is a drop in the ocean, but a drop that does not add to the tide of debt.

What must not be missed is that, if approved, those at the helm of the CBN must treat this grant not as free money but as a strategic investment for the good of the country and its populace.

Transparency in spending, rigorous capacity building, and a laser focus on supervisory tools will ensure the funds deliver long-term impact. Proper utilisation will strengthen public confidence in the CBN and Nigeria’s financial system, proving that external support can be harnessed responsibly.

The cut may sting, but it does not wound. Nigeria should view this grant as an opportunity to sharpen priorities, reinforce financial oversight, and demonstrate that even reduced support can yield significant gains if used wisely.

Although there is no immediate cause for alarm regarding Nigeria’s increasing debt profile, and while the reduction has been described as routine, as the World Bank Board is now set to review and potentially approve the revised $6.8 million grant in March, Nigerians must not stop asking questions.