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Nigeria seeks 18-month extension for World Bank’s $800m palliative loan

THE Nigerian government has requested an 18-month extension for the $800 million World Bank palliative loan scheme as the country battles against rising inflation and other economic challenges.

A restructuring paper document on the project reportedly from the World Bank, revealed that the Nigerian government asked to extend the closing date of the project from June 30 this year to December 31 next year.

The aim is to realign the project timelines and enhance the efficacy of the National Social Safety Net Program-Scale Up (NASSP-SU).

“This paper seeks approval from the Country Director for a Level II restructuring of the National Social Safety Net Program Scale-Up project (NASSP-SU, P176935, Credit No. 7019-NG), an US$800 million Investment Project Financing (IPF).

“The restructuring will extend the project closing date by 18 months from June 30, 2024, to December 31, 2025. The benefit size and duration of the cash transfers under component 1 will also be changed,” the document stated.

It contained further that the Nigerian government also sought to change the chairmanship of the project’s national steering committee from the Minister of Humanitarian Affairs and Poverty Alleviation to the Minister of Finance.

The NASSP-SU project, initiated to provide shock-responsive safety net support to the country’s poor and vulnerable, was approved on December 16, 2021, and became effective on January 30, 2023.

The Federal Government planned to use the scheme to run a monthly cash transfer program for poor and vulnerable Nigerians, badly impacted by fuel subsidy removal and other President Bola Tinubu-led administration reforms.

The cash transfer programme has suffered mistrust,  following a probe of alleged misconduct by the Ministry of Humanitarian Affairs and Poverty Alleviation in management of the scheme.

Part of the mistrust had led to the suspension of the former Ministry of Humanitarian Affairs and Poverty Alleviation, Betta Edu.

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So far, about 39 per cent of the entire loan has been released to Nigeria, leaving about  $485 million balance.

The scheme gives N75,000 to each beneficiary household, spread across three months to help mitigate the adverse effects of rising inflation and the government’s economic reforms.




     

     

    “Since its start, about 30 million beneficiaries have been covered by social safety net programs, and about three million poor and vulnerable households have received shock-responsive cash transfers as of May 2024. Of these beneficiaries, 700 thousand households were from rural areas and about 2.5 million households were from urban areas. 1,652 urban wards have been covered through the targeting system developed under the project,” the document stated.

    It added that a planned digital payment delivery mechanism had been implemented, using straight-through processing to deliver transfers directly to beneficiaries’ accounts or wallets while the National Social Register is being integrated with the National Identification Number to further strengthen the targeting system.

    The ICIR reported that Tinubu had in July 2023 sought Senate approval for the $800 million palliative loan from the World Bank, which he described as “shock-responsive safety net supports for all and vulnerable Nigerians and the cost of meeting basic needs.”

    However there have been worries about the disbursement of the palliative fund to vulnerable Nigerians amid concern about an authentic national social register as the National Economic Council (NEC) discredited the old register and called for a new one.

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