World Bank Flags Costly Inefficiencies in Public Spending in Nigeria, Urges Reforms

|By Adejumo Adekunle –

• Billions Lost Annually: Inefficiencies waste over a third of public investments in EMDEs.
• White Elephant Projects: High-cost, low-return initiatives erode economic stability.
• Path to Reform: Transparency and monitoring can transform public spending efficiency.

The World Bank has raised concerns over the inefficiencies in public spending, which it says are draining investments in Nigeria and other developing countries.

In its latest report titled “How Can Developing Countries Power Up Public Investment?” the global financial institution revealed that over one-third of public investment in emerging markets and developing economies (EMDEs) is wasted due to inefficiency.

These inefficiencies often lead to costly projects with minimal economic benefits, commonly referred to as “white elephant” projects. The report warned that such practices undermine growth, increase debt risks, and limit development potential.

The World Bank attributed these issues to institutional weaknesses like regulatory delays and corruption, which lower project quality. To address this, it recommended transparent procurement processes and better project monitoring to maximize the impact of public spending.

The call for reforms aligns with Nigeria’s finance minister, Wale Edun’s statement that the country requires $20 billion in annual investment to hit its $1 trillion economy target by 2030.