World Bank approves $2.25bn loan for Nigeria To Support Economic Reform

Wale Edun, the minister of finance and coordinating minister of the economy, has announced the approval of two major “financial support packages” by the World Bank — valued at $2.25 billion.

The World Bank approved $2.25 billion in funding to support Nigeria’s economic reform efforts, helping to boost the supply of hard currency on the local foreign-exchange market. 

The fresh funds will support Africa’s largest oil producer’s efforts to stabilize the economy and assist the poor and most economically at risk, the Washington-based lender said in a statement  on Thursday. It will also help the country raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and deliver quality public services, it said.

“The approved operations include $1.5 billion 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) Program-for-Results (PforR),” the statement reads.

“The combined total of $2.25 billion will provide essential financial and technical support as the government continues to address economic distortions.”

Additionally, Manga said the support package will assist Nigeria in its long-term goal of increasing non-oil revenues and securing oil revenues to ensure fiscal sustainability and the delivery of quality public services.

He said ‘RESET’ aims to strengthen Nigeria’s economic policy framework, create fiscal space, and protect the poor and vulnerable.

The statement also noted that ‘Armor PforR’ supports tax and excise reforms, improves tax revenue and customs administration, and safeguards oil revenues.

Commenting on the approval, Edun welcomed the support of the World Bank.

“We have undertaken bold and necessary reforms to restore macroeconomic stability and put Nigeria on a path to sustainable and inclusive economic growth,” he said.

“These reforms will create quality jobs and economic opportunities for all Nigerians.

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

On his part, Ousmane Diagana, the World Bank vice-president for Western and Central Africa, lauded the country’s efforts in reforming the financial sector.

“Nigeria’s comprehensive macro-fiscal reforms are placing the country on a new path that can stabilize the economy and lift people out of poverty,” Diagana said.

“It is essential to maintain the momentum of these reforms and continue to provide support to the poor and vulnerable to mitigate the impact of the cost-of-living crisis.”

The vice-president said the financing package will strengthen the World Bank’s strong partnership with Nigeria and support efforts to rejuvenate the economy and expedite poverty reduction, serving as an example for Africa.