THE Federal Government is set to receive a fresh $2.25 billion loan from the World Bank on June 13.
The loan is expected to fund two major development projects. The first is the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing, which will receive $1.5 billion.
The second project, the NG Accelerating Resource Mobilization Reforms Programme-for-Results, seeks $750 million.
Recent information suggests that the government may have secured a loan.
During the spring meetings of the International Monetary Fund and the World Bank, Minister of Finance Wale Edun announced that the nation qualified for a loan of $2.25 billion from the World Bank, described as almost a grant due to its favourable terms.
The package, approved by the World Bank’s Board of Directors, offers a 40-year term, including a 10-year moratorium, and a nominal one per cent interest rate.
He stated, “We have qualified for the processing just this week to the Board of Directors of the World Bank of a total package of $2.25 billion of what you can call ‘the closest you can get to a free lunch’- virtually a grant. It’s for about 10- 20 years moratorium and about one per cent interest.”
Based on the information on the international lender’s website, the two projects aim to improve Nigeria’s economic stability and ability to mobilise resources.
The funds are expected to support Nigeria’s efforts to reform its economy and improve government resource mobilisation, which are crucial for its long-term financial health and economic resilience.
The document outlines that the primary goal of the PforR programme is to increase non-oil revenues and protect oil and gas revenues from 2024 to 2028 at the federal level, with a focus on significant tax, excise, and administrative reforms.
The programme encompasses three key areas of results: implementing tax and excise reforms to boost VAT collections and excise rates on health and environmentally friendly products, strengthening tax and customs administrations to enhance VAT compliance and audit effectiveness, and safeguarding oil and gas revenues by enhancing transparency and net revenue contributions.
Additionally, the PforR programme provides technical assistance to support the Federal Inland Revenue Service and the Nigeria Customs Service in improving taxpayer and trader compliance.
“The principal programme development objective is to raise non-oil revenues and safeguard oil and gas revenues. This result area aims to increase the transparency of NNPCL’s financial and operational performance through audits and regular production of enhanced reports submitted to FAAC, including all relevant information; and increase net oil and gas revenues transferred to the federation,” the report read.
The ICIR reported that Nigeria has taken multiple loans from the World Bank since President Tinubu became the president amid debt crisis facing the country.
The first was approved on June 9, 2023 with a loan of $750m to boost Nigeria’s power sector. The World Bank said the loan would serve as additional financing for the power sector recovery performance-based operation.
On June 27, the World Bank Group announced the approval of a loan of $500 million to help Nigeria drive women’s empowerment. This was the second loan approved by the Bank under Tinubu’s administration. It provided a scale-up financing for the Nigeria for Women Programme.
In September 2023, the Group approved a loan of $700 million to bolster educational opportunities and empowerment for adolescent girls in Nigeria. The loan was to support the ongoing ‘Adolescent Girls Initiative for Learning and Empowerment’ (AGILE) project. It aimed to encourage secondary education accessibility for girls residing in specific target states within Nigeria.
On December 14, $750 million was disbursed for Distributed Access through a Renewable Energy Scale-up (DARES) project in Nigeria. The project aims to provide over 17.5 million Nigerians with better access to electricity via distributed renewable energy solutions and tackle the electricity access deficit.
Nurudeen Akewushola is an investigative reporter and fact-checker with The ICIR. He believes courageous in-depth investigative reporting is the key to social justice, accountability and good governance in society. You can reach him via nyahaya@icirnigeria.org and @NurudeenAkewus1 on Twitter.