Infrastructure deficiency may worsen in Africa if U.S. withdraws support

Experts have expressed concern for African countries that are deficient in infrastructure over the possibility of the United States stopping the funding of the World Bank Group (WBG) and the International Monetary Fund (IMF).

This is because the World Bank offers low-interest loans for infrastructural projects such as roads, railways and flood defences.

It also plays a key role in developing financial tools like green bonds, supporting risk management initiatives and so on.

Nigeria has received over 130 loans and credits since independence including recent support for healthcare and education.

The World Bank has supported Nigeria through various projects and programmes focusing on poverty reduction, human capital development and economic diversification with a recent emphasis on economic stabilisation and resource mobilisation.

It has also provided Nigeria with low-interest rate loans and grants through the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD).

Recently, Nigeria benefited from a $500 million loan facility for the human capital opportunity for Prosperity and Equity Project (HOPE) in the country.

All these may no longer happen if the US withdraws its funding because apart from being a leading force in the establishment of the World Bank in 1944, it remains its largest shareholder.

While there is no to portray the fact that the U.S. is serious about withdrawing financial support, a capital market operator, Ajayi Olawusi said there are indications that the U.S. may do so.

Olawusi cited the fact that American President Donald Trump has made cutting waste a priority in his second term.

“The establishment and implementation of the presidential Department of Government Efficiency (DOGE) is a metaphor for any other cost-cutting project which may affect everything,” said Olawusi.

A financial expert, Dixon Okechukwu also stated that withdrawal could weaken global institutions thereby creating uncertainty and impacting the global financial system. Also notable, he said is the fact that China may likely take over the major shareholding status, use it to rival America and create more hostility among these financial giants.

“I hope America continues to fund these global institutions. America should retain this status. This is no time to step back. I agree with cutting wastages but not withdrawing funding,” said Okechukwu.

The IMF and the World Bank were created after the Second World War to promote global financial stability. While the World Bank offers loans to member countries, the IMF acts as a lender of last resort for countries facing liquidity crises.