Emmanuel OchayiThe Federal Government of Nigeria has secured a loan from the World Bank, receiving a total of $2.25 billion.
This funding, announced by the international lender on Thursday, is part of two major financial operations aimed at strengthening Nigeria’s economic stability and supporting its vulnerable populations.
The World Bank’s statement detailed the approval of two financial packages: the $1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and the $750 million Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.
“The World Bank has today approved two operations: $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and $750 million for the Nigeria Accelerating Resource Mobilization Reforms Programme-for-Results,” the statement read. “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 people whose income is below the poverty threshold and most economically at risk.”
READ ALSO: Monetary Policy Tightening May Not Curb Inflation- World Bank Warns CBN
The primary objective of this financial aid is to offer immediate support for Nigeria’s urgent economic stabilization efforts. It is also intended to enhance the country’s non-oil revenue generation and safeguard oil revenues, promoting fiscal sustainability and enabling the delivery of quality public services.
“This package 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,” the statement added.
Last month, Prime Business Africa reported that the government was poised to receive this fresh loan funding, with approval anticipated for June 13, 2024.
The Minister of Finance, Wale Edun, at the spring meetings of the International Monetary Fund and the World Bank, announced that Nigeria had qualified for processing a loan described as ‘virtually a grant’ of $2.25 billion from the World Bank at a one percent interest rate.
“We have qualified for the processing just this week to the Board of Directors of the World Bank of a total package of $2.25 billion of what you can call ‘the closest you can get to a free lunch’ – virtually a grant. It’s for about 10-20 years moratorium and about one percent interest,” Edun stated.
The package, approved by the World Bank’s Board of Directors, offers a 40-year term with a 10-year moratorium and a nominal one percent interest rate. This long-term, low-interest funding is expected to significantly bolster Nigeria’s economic reform efforts.
This funding is crucial as Nigeria continues to navigate economic challenges and work towards financial stability. The focus on enhancing non-oil revenues is particularly important for diversifying the country’s economy and reducing dependence on oil exports.
By bolstering fiscal sustainability and supporting vulnerable populations, the World Bank’s financial assistance aims to provide the necessary resources for Nigeria to achieve long-term economic growth and stability. The success of these initiatives will be critical for the country’s economic future, impacting millions of Nigerians and promoting sustainable development.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
