BusinessNewsNigeriaWorld Bank Approves $2.25b Loan to Support Nigeria’s Economic Recovery

The World Bank has approved a US$2.25 billion loan for Nigeria to bolster economic stability and support vulnerable populations within the country.

The loan will be used to provide immediate financial and technical support for Nigeria’s urgent economic stabilisation efforts and to enhance the country’s non-oil revenue generation and safeguard oil revenues.

According to Ousmane Diagana, the World Bank Vice President for Western and Central Africa, “Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilise 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.”

The package consists of two key components:

a) US$1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing (DPT) Program to support the Nigerian government’s efforts to implement economic reforms and achieve macroeconomic stability.

b) US$750 million Nigeria Accelerating Resource Mobilization Reforms Program-for-Results (ARMOR PforR) to assist the government in generating additional revenue streams through targeted reforms.

The World Bank is offering the loan at a significantly reduced interest rate of one percent. Additionally, the loan comes with a 40-year repayment term, including a 10-year grace period before repayments begin. These favourable terms are intended to minimise the additional financial burden on Nigeria.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, welcomed the approval, emphasising its importance in supporting the government’s economic agenda.

“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 stated.

“We welcome the RESET and ARMOR programmes as we further consolidate and implement our policy reforms, consistent with accelerating investment and using public resources more sustainably to achieve our development goals.”