The World Bank has confirmed that the 800 million dollar loan was granted as of December 2021, when the government of Muhammadu Buhari was considering eliminating fuel subsidies.
Its Nigerian Country Director, Dr Shubham Chaudhuri, announced this on Tuesday at a World Bank event to analyse the country’s economy over the last six months.
Chaudhuri clarified that the fund is a loan, not a grant, as previously assumed.
He stated that the cash will be used to alleviate the miseries of the poor and vulnerable as a result of the termination of the fuel subsidy.
The loan was postponed because Former President Muhammadu Buhari held off on eliminating fuel subsidies until his final days in office.
Few weeks to his handover, Buhari had sent a letter to the Senate seeking approval to take a loan to the tune of $800 million from the World Bank to cushion the effects of subsidy removal.
The former Minister of Finance, Budget and National Planning, Zainab Ahmed, had said that the disbursement of the fund is in light of the planned subsidy removal in June 2023.
On his inauguration on May 29, President Bola Tinubu eventually announced the removal of the petrol subsidy.
The Nigerian Petroleum Company (NNPC) Limited, 48 hours after Tinubu’s declaration, announced price adjustment for petrol.
The World Bank Country Director also expressed support for the Federal Government’s subsidy removal and the exchange rate unification.
According to Chaudhuri, the policy though painful remains key to rebuilding the economy of the nation.