The World Bank has approved a $2.25 billion financial package for Nigeria.
The package consists of two key operations: $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.
A World Bank document released on June 13, 2024, this combined package provides immediate financial and technical support for Nigeria’s efforts to stabilize its economy and assist the poor and economically vulnerable.
The financing also supports Nigeria’s multi-year strategy to increase non-oil revenues, safeguard oil revenues, ensure fiscal sustainability, and deliver quality public services. This package is part of a broader effort to implement vital reforms and address economic challenges facing the country.
The $1.5 billion loan was structured in two parts. The first tranche, a $750 million credit from the International Development Association , IDA, has a 12-year maturity period with a six-year grace period.
The second tranche, another $750 million loan from the International Bank for Reconstruction and Development, IBRD, comes with a 24-year repayment period and an 11-year grace period. The first tranche was disbursed on July 2, 2024, while the second tranche, which depends on the fulfillment of specific reform conditions, was released in November 2024.
The RESET DPF focuses on strengthening Nigeria’s economic policy framework by creating fiscal space and protecting vulnerable populations. Meanwhile, the ARMOR PforR aims to implement tax and excise reforms, strengthen tax administration, and safeguard oil revenues.
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The World Bank noted that Nigeria has taken several crucial steps to stabilize its economy, including unifying official exchange rates, adjusting gasoline prices to phase out costly subsidies, and refocusing the Central Bank of Nigeria on its core mandate of price stability. Additionally, a targeted cash transfer program is being rolled out to assist households affected by inflation.
In a statement, the World Bank highlighted that Nigeria had met the conditions for the second tranche and made significant progress in implementing its reform agenda. The government has also exceeded expectations by immediately deregulating the fuel market, a measure that was initially planned for gradual implementation.
As of October 2024, the price of Premium Motor Spirit , PMS, is determined by the international market and the Central Bank of Nigeria’s exchange rate.
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, expressed appreciation for the support of the RESET and ARMOR programs, emphasizing the government’s commitment to restoring macroeconomic stability and promoting inclusive growth.
Ousmane Diagana, the World Bank Vice President for Western and Central Africa, praised Nigeria’s efforts to implement far-reaching reforms, noting that these measures could stabilize the economy and reduce poverty.
He emphasized the importance of sustaining reform momentum to protect vulnerable populations and further accelerate poverty reduction.
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