World Bank Disburses $300m Palliative Loans
The World Bank has commenced payment of the $800m approved for the National Social Safety Net Program-Scale Up.
Reports said that the bank has disbursed about $299.99 million to Nigeria under the National Social Safety Net Programme-Scale Up approved by the World Bank on December 16, 2021.
Documents obtained from the World Bank confirmed the payment adding that the disbursement was made recently.
This means that with about 37.5 per cent of the entire loan disbursed, there is a pending balance of about $442.88m.
The $800m social safety net programme is a condition cash transfer scheduled to be implemented by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation.
With this loan, the Federal Government plans to run a monthly cash transfer programme for poor and vulnerable Nigerians, who have been hit hard by recent policies, such as the fuel subsidy removal.
In October 2023, President Bola Tinubu, formally launched the promised conditional cash transfer programme targeted at 15 million households nationwide billed to receive N75,000 within three months.
The document also said that the Federal Government is currently seeking the services of a consulting firm to help with the upgrade of the system for the cash transfer programme.
The document partly read, “The Federal Republic of Nigeria has received financing from the World Bank toward the cost of the National Cash Transfer Office under the Federal Ministry of Humanitarian Affairs & Poverty Alleviation and implementing agency of the Client and intends to apply part of the proceeds toward payments under the contract for Upgrade of MIS for NASSP-SU.”
“The consulting services (“the Upgrade of MIS for NASSP-SU”) include carrying out the development, implementation, deployment, and maintenance of a user-friendly, interactive, web-based MIS System to support the activities of NASSP – -SU of the Federal Republic of Nigeria for effective and efficient delivery of Programme benefits to the Poor and Vulnerable. For the estimated level of effort (professional staff months) as contained in the TOR, for an implementation period of 120 days plus warranty and after-sales service; the expected start date of assignment, should be in the next three months from the advert date.”
This upgrade is necessary as the National Economic Council decided earlier not to use the social register from the previous administration of Muhammadu Buhari for running the conditional cash transfer program due to credibility issues.
The financing agreement document for the National Social Safety Net Program-Scale Up between the Federal Republic of Nigeria and the International Development Association of the World Bank sighted by our correspondents showed that the repayment will be made in installments, with the first payment due on January 15, 2027, and the last payment due on July 15, 2051.
The $800m loan obtained by the Federal Government attracts a maximum commitment charge rate of one-half of one per cent per annum on the Unwithdrawn Financing Balance and a service charge of three-fourths of one per cent per annum on the withdrawn credit balance, according to the document.
It also disclosed that the interest charge is one and a quarter per cent per annum on the withdrawn credit balance.
Also, a percentage of the principal amount of the loan is expected alongside the other charges, and this will increase over time.
While the first payment will be 1.65 per cent of the principal amount, the last payment will be 3.40 per cent.
Olusola Akintonde/Punch
