World Bank approves fresh $2.25b support for Nigeria

The World Bank has announced the approval of $2.25 billion in financial and technical support for Nigeria.

The facility is in two folds: $1.5 billion for the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Program (DPF) and $750 million for the Nigeria Accelerating Resource Mobilisation Reforms (ARMOR) Programme-for-Results (PforR).

As at press time, details of the support were still sketchy.

A statement issued by the bank said the package would provide immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk.

It would also 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 statement said.

Confronted with a fragile economic situation, Nigeria under President Bola Tinubu recognised the urgency of changing course and embarked on critical reforms to address economic distortions and strengthen the fiscal outlook.

Initial critical steps to restore macroeconomic stability, boost revenues while creating the conditions to reignite growth and poverty reduction have been taken.

The efforts include unifying the multiple official exchange rates and fostering a market-determined official rate as well as adjusting the prices of fuel to begin to phase out the costly, regressive, and opaque gasoline subsidy.

The Central Bank of Nigeria (CBN) also said it has refocused on its core mandate of price stability and is tightening monetary policy including by increasing interest rates, as is appropriate to reduce inflation.

A targeted cash transfer programme was initiated to cushion the impact of high inflation on poor and economically insecure households.

“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,” said Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy.

   “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,” the World Bank Vice President for Western and Central Africa, Ousmane Diagana, was quoted in the statement.

  He added that the “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.”

The RESET DPF is focused on supporting Nigeria to strengthen its economic policy framework by creating fiscal space and protecting the poor and economically insecure. The ARMOR PforR will support efforts to implement tax and excise reforms, strengthen tax revenue and customs administrations, and safeguard oil revenues.