World Bank approves fresh $2.25bn loan for Nigeria

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The World Bank has approved two major financing operations targeted at improving Nigeria’s economic stability and assisting its disadvantaged communities.

According to a bank statement issued on Thursday, the combined package, worth $2.25 billion, includes the $1.5 billion Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme (DPF) and the $750 million Nigeria Accelerating Resource Mobilisation Reforms (ARMOUR) Program-for-Results (PforR).

This financial infusion is designed to provide immediate financial and technical assistance to Nigeria’s urgent economic stabilisation measures.

It also aims to enhance the country’s non-oil revenue generation and safeguard oil revenues, thereby promoting fiscal sustainability and enabling the delivery of quality public services.

The statement from the bank read: “The World Bank has today approved two operations: $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF) and $750 million for the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR).

“This combined $2.25 billion package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilize the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.”

Bold reforms to restore macroeconomic stability

In the statement by the World Bank, Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, was quoted, expressing optimism about the reforms.

He said: “We have embarked on bold and necessary reforms to restore macroeconomic stability and put the country back on a sustainable and inclusive economic growth path that will create quality jobs and economic opportunities for all Nigerians.

“We welcome the support of the RESET and ARMOR programs as we further consolidate and implement our macro-fiscal and social protection policy reforms, consistent with accelerating investment and redirecting public resources sustainably to achieve development priorities.”

Also. Ousmane Diagana, the World Bank Vice President for Western and Central Africa, highlighted the importance of sustaining the reform momentum.

Diagana said: “Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty. It is critical to sustain the reform momentum and continue to scale up and expand protection to the poor and economically at risk to cushion the effects of cost-of-living pressures on citizens.

“This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”

What you should know

During a press briefing at the end of Nigeria’s activities at the World Bank/IMF Spring Meetings in Washington DC, the United States, the Minister of Finance, Wale Edun, had said that the Federal Government was looking forward to receiving around $2.2 billion single-digit interest loan from the World bank and another budget support facility from the African Development Bank (AfDB).

The World Bank might approve loans to Nigeria totalling $2.25 billion across two major projects on June 13, 2024.

Data from the external debt stock report of the Debt Management Office (DMO) shows that Nigeria owes the World Bank a total of $15.45 billion as of December 31, 2023.