The World Bank has stated that the $1.5 billion loan to Nigeria is still in the works and has called for more monetary reforms going forward.
This was disclosed by Shubham Chaudhuri, World Bank Country Director for Nigeria, on Thursday during the presentation of the World Bank Nigeria Development Update (NDU) for December.
Chaudhuri stated that despite the reforms that had been put in place by the Federal Government, the World Bank was being cautious and had its reservations.
“I think the way that our board and our shareholders have approached this budget support, is really to say has the country that is requesting the support done all it can to help itself?” he said.
“Think of it this way, when you have say a 10 or 15 billion dollar hole, 1.5 billion dollars is just a little bit of that, the question is how is the rest of that hole being made up?
“What is the sustainability in 2021 and beyond? And that is why we are thinking about the overall prospects going forward, in terms of the macro adequacy and the flexibility and exchange rate management.”
He said the World Bank recognised the effort Nigeria had made, but the country still needed “sound macro-fiscal footing.”
“That is why our shareholders and our management are still saying we recognise how much Nigeria has done, but for this $1.5 billion to really be a part of the larger effort to put Nigeria on a sound macro-fiscal footing going forward, there needs to be a little bit more.”
He added that the World Bank was working on another $1.5 billion loan different from the budget support loan, which was two separate $750 million credits to support state government’s efforts, slated for approval on December 14.
“So, one is additional financing for the State’s Fiscal Transparency Accountability and Sustainability (SFTAS) programme for results.
“The other is the Nigeria COVID-19 Action Recovery and Economic Stimulus (CARES) Programme, which is meant to support the states towards protecting livelihoods, enhancing food security and supporting local economic activity.
“So those are the two operations that are being considered by our board on Monday,” he said.
What you should know
- Nairametrics reported in August that the World Bank was yet to approve the much-needed $1.5 billion loan sought by Nigeria in August. The delay was due to concerns over reforms, even as the World Bank believed that the country had not shown enough commitment towards achieving them.
- Minister for Finance, Budget and National Planning, Zainab Ahmed, said Nigeria was set to achieve its plans of getting the $1.5 billion World Bank loan package, as it was in the closing stages of the deal, following its fulfilment of the conditions set by the international multilateral organization.