According to the World Bank Nigeria and other developing nations are squandering a significant portion of their public funds due to inefficient spending. This was disclosed in their December 16 2024 report How Can Developing Countries Power Up Public Investment?.
According to the report bad spending habits cause developing nations to lose over one-third of their public investments which hinders their ability to grow economically. This occurs when government expenditures don’t yield a commensurate return. In the worst situations this results in costly initiatives that provide little economic benefit—known as white elephant projects. As a result, countries may find it more difficult to manage their debts.
According to the World Bank: To maximize the returns on public investment government spending efficiency must be improved. According to estimates inefficiencies in EMDEs could cost the government more than one-third of its investment which is significantly higher than in developed nations. Lower-quality projects are frequently the result of institutional flaws like corruption and regulatory bottlenecks. .
To address these issues the World Bank recommends that developing nations improve the transparency and openness of their procurement procedures, establish more effective methods for project inspection and assessment, and maintain infrastructure more effectively to extend its lifespan. Additionally they advise improving tax collection cutting back on wasteful spending improving debt management and increasing investments in critical sectors like infrastructure healthcare and education. The World Banks guidelines can be used by nations to assess their public money management practices according to the report. Additionally it implies that governments could collaborate with private businesses even though this hasn’t always worked out in the past.
The World Bank also stated that thanks to new technology governments no longer have to supply everything themselves such as mobile phone networks. Instead they should concentrate on ensuring that these services function properly through appropriate regulation.
Lastly the World Bank demanded increased foreign assistance for developing nations particularly for large-scale climate change projects. In their own words The international community must step up particularly on climate-related infrastructure projects to ensure that developing nations have the resources to make lasting progress.
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