Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun says the Federal Executive Council (FEC) has approved an application to secure a budget support loan worth $1.5bn and an additional $80 million from the World Bank.
These funds the Minister says will be utilized for various projects in crucial sectors of the nation’s economy.
Briefing State House Correspondents after the Monday FEC meeting, Mr. Edun said that the federal government would receive the financial intervention of $1.5bn as a whole before the end of the year 2023, expecting it to fulfil its part of the agreement.
Mr. Edun clarified that the council granted the approval for the request for financial assistance from the World Bank, specifically from the International Development Association.
“This arm of the World Bank provides loans at nearly zero interest rates, effectively making it very low-cost financing,” he explained
“The total is $1.5 billion. The world today is one with high-interest rates as the developed world looks to fight inflation. They do it by restricting money keeping interest rates high so that you can get inflation down.
“It said Nigeria qualified for the “relatively cheap” loans given its “macro-economic moves” in the past couple of months since President Bola Tinubu assumed office.
“What that means is that interest rates for everybody else become not just high but very painful, if not unaffordable within that context.”
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Edun went on to explain that Nigeria has implemented significant macroeconomic measures and made difficult decisions to bring stability to its economy, making it deserving of support from multilateral development institutions.
“The bold, brave, courageous and decisive measures that Mr. President has taken is being rewarded by processing for Nigeria $1.5bn of immediate financing which, provided that we do everything on our side, will be in before the end of the year.
“It is based on that the World Bank is willing to consider and to process on our behalf $1.5bn of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.
And it comes in one go. It doesn’t drip as will be done for a project and it is just to support the reform effort. And that was what was presented to the Federal Executive Council and the members approved that we go ahead with that financing given that it is affordable,” Edun added.
The Minister emphasized the effect of the cause and consequences of recent reforms on the nation.
“Although some effects are in place, such as the relative reduction in smuggling and rising domestic production in some areas, “It takes time before the full benefits are in and in,” he noted.
The finance minister also revealed that the Council approved $80m financing from the African Development Bank.
“This financing is for a project in Ekiti called the Ekiti Knowledge Zone Project. EKZ is basically to support young people and their quest to take on technology to use it to be employed, trained and benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.
“So, it’s $80 million to help the young people in the sector of the knowledge economy technology and communications generally.”
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