World Bank finally approves Nigeria’s $ 1.5 billion loan request
The World Bank finally approved Nigeria’s request for a loan of $ 1.5 billion as budget support and to help cushion the impact of the coronavirus pandemic on the country’s income.
This was disclosed in a statement from the World Bank on Tuesday, December 15, 2020, where it noted that the facility is a 5-year Country Partnership Framework (CPF) that will run from 2021 to 2024.
In its statement, the bank said the facility had been prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
What the World Bank says
The World Bank in its own statement added that Nigeria is at a critical point hence the approval of the loan.
The statement reads in part: “With the sharp drop in oil prices due to COVID-19, the economy is expected to contract by more than 4% in 2020, plunging the country into its deepest recession since the 1980s. Government revenues could fall by more than $ 15 billion this year, and the crisis will push another 5 million Nigerians into poverty in 2020. ‘‘
world Bank The board of directors also approved the amount of $ 1.5 billion for two projects in Nigeria. These projects include Nigeria Covid-19 Action Recovery and Economic Stimulus, Program for Results (Nigeria CARES) and State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS).
The 2 projects are expected to benefit from a $ 750 million facility through the International Development Association (IDA).
What the directors of the World Bank and IFC say
World Bank Country Director for Nigeria Shubham Chaudhuri said: âThis national partnership framework will guide our commitment for the next 5 years to support the strategic priorities of the Government of Nigeria by taking a phased and adaptive approach. ”
IFC’s Director for Southern Africa and Nigeria, Kevin Njiraini, also said. “The Country Partnership Framework builds on the World Bank Group to enable inclusive and sustainable business growth. ”
Areas of intervention of the establishment
- The Bretton Wood Institution facility will focus on four areas of engagement which include investing in human capital by increasing access to basic education, quality water and sanitation services. ; improving primary health care; and increase the coverage and effectiveness of social assistance programs.
- Promote employment and economic transformation and diversification by supporting measures to unlock private investment and job creation and improving access to reliable and sustainable energy for households and businesses.
- The CPF will also focus on strengthening digital infrastructure and developing economic corridors and smart cities, to improve the livelihoods of Nigerians.
What you should know
- The World Bank had delayed approval of the $ 1.5 billion facility over concerns over some critical reforms, as the bank believes Nigeria has not shown sufficient commitment to carry them out.
- Some of these key reforms include exchange rate flexibility and unification, the removal of fuel subsidies and an increase in electricity tariffs.