FG Seeks World Bank Loan Approval For $2.25bn Funding – Details

• Federal Government seeks World Bank loan approval for $2.25bn Funding

• Funds earmarked for two major development projects.

• Loans aimed at enhancing economic stability, resource mobilization, and fiscal reforms in Nigeria.

EKO HOT BLOG reports that the Federal Government is gearing up to secure new loan funding from the World Bank, with approval anticipated for loans amounting to $2.25bn on June 13, 2024.

The funding will be allocated to two significant development projects.

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The first project, the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing, is slated to receive $1.5bn.

The second project, NG Accelerating Resource Mobilization Reforms Programme-for-Results, is seeking funding of $750m.

Recall that the government might reintroduce previously suspended telecom tax and other fiscal measures in pursuit of securing the $750m loan.

A copy of the plan’s document posted on the World Bank website indicated that the government might

reintroduce the excises on telecom services, and EMT levy on electronic money transfers through the Nigerian Banking System among other taxes.

World Bank Loan Approval

However, the latest information suggests that the administration may have nearly guaranteed the loan.

The Minister of Finance, Wale Edun, at the spring meetings of the International Monetary Fund and the World Bank last month, had announced that the nation had qualified for processing a loan, described as ‘virtually a grant’ of $2.25bn from the World Bank at one per cent interest rate.

The package, approved by the Board of Directors of the World Bank, offers a 40-year term with 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 $2.25bn 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.”

According to programme information documents posted on the international lender website, the two projects aim to enhance Nigeria’s economic stability and resource mobilisation capabilities.

It is expected that the funds will bolster Nigeria’s efforts in reforming economic policies and enhancing government resource mobilisation, essential for the country’s long-term financial sustainability and economic resilience.

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The document stated that the primary aim of the PforR programme is to boost non-oil revenues and safeguard oil and gas revenues from 2024 to 2028 at the federal level, emphasising substantial tax, excise, and administrative reforms.

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