The World Bank on Tuesday announced the approval of a combined $2.25 billion financial and technical support to Nigeria’s efforts to stabilize the economy and enhance the drive towards poverty reduction, to protect the poor and most economically vulnerable people.
The loan package included a $1.5 billion facility 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) Programme-for-Results (PforR).
The latest loan package follows a $500 million loan announced by the Bank last month to help the country address the identified gaps in the operations of the electricity distribution companies (DISCos).
The Bureau of Public Enterprises (BPE) said the facility was to provide funding supports to the Nigerian Distribution Sector Recovery Programme (DISREP) to improve the financial and technical performance of the DisCos through capital investment and the financing of key components of their Performance Improvement Plans (PIPs) approved by the Nigerian Electricity Regulatory Commission (NERC).
But the World Bank said in a statement from Washington that the fresh $2.25 billion loan would further support 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 Minister of Finance and Coordinating Minister of the Economy, Wale Edun, acknowledged the loans as part of President Bola Tinubu’s ongoing efforts to stabilize and reposition the economy for sustained and inclusive growth, address economic distortions and provide urgent support to the poor and vulnerable.
Edun said assumption of office, the Federal Government was confronted with significant economic challenges, which necessitated urgent reforms to correct the economic imbalance and strengthen Nigeria’s financial outlook.
He said initial critical steps were taken to restore macroeconomic stability, boost revenues, and create the conditions necessary to reignite growth and reduce poverty.
These included unifying the multiple official exchange rates of the Naira and fostering a market-determined official rate, as well as the removal of subsidy from the pricing template of premium motor spirit (PMS), popularly called petrol.
Also, the Central Bank of Nigeria (CBN) has refocused on its core mandate of price stability by embarking on the tightening of the monetary policy through the consistent upward adjustment of the controlling lending interest rates to curb spiraling inflation.
“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,” Edun said.
“We welcome the support of the RESET and ARMOR programmes 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”, he added.
The World Bank Vice President for Western and Central Africa, Ousmane Diagana, noted Nigeria’s efforts to implement macro-fiscal reforms to stabilize its economy and lift its people out of poverty.
Diagana said it was critical for the country 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”, he explained.
He said the RESET DPF is focused on supporting Nigeria strengthen its economic policy framework by creating fiscal space and protecting the poor and economically insecure, while the ARMOR PforR would support efforts to implement tax and excise reforms, strengthen tax revenue and customs administrations, and safeguard oil revenues.