World Bank Approves $2.25bn Support Package for Nigerian Economic Reforms
By Patience Ikpeme
The World Bank has approved a $2.25 billion financial support package. This announcement comes as part of the government’s ongoing plan to stabilize the economy, achieve long-term growth, and assist vulnerable populations.
The World Bank’s support is divided into two major programmes: the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF). This $1.5 billion programme aims to strengthen Nigeria’s economic policies, create space in the national budget, and protect those most affected by economic challenges, and the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR). This $750 million programme focuses on tax and excise reforms, improving tax collection and customs administration, and safeguarding oil revenue.
The Nigerian government has acknowledged the need for economic reforms following a period of difficulty. They have taken initial steps to address these challenges, including unifying; previously, Nigeria had multiple official exchange rates. These have been consolidated into a single, market-determined rate; the costly fuel subsidy has been undergoing adjustments to make it more sustainable; the Central Bank of Nigeria (CBN) is refocusing on controlling inflation through measures like raising interest rates and targeted cash transfer programmes are being rolled out to provide relief to low-income families facing high inflation.
Nigeria’s Finance Minister, Mr. Wale Edun, welcomed the World Bank’s support and emphasized the importance of the reforms. “These bold steps are necessary to restore economic stability and put Nigeria on a path to sustainable and inclusive growth,” he said. “The RESET and ARMOR programs will be crucial as we continue to implement these reforms, create jobs, and invest in our future.”
The World Bank’s Vice President for Western and Central Africa, Ousmane Diagana, praised Nigeria’s commitment to economic reform. “These comprehensive reforms position Nigeria for a brighter future with a stable economy and reduced poverty,” he stated. “Maintaining this momentum and supporting vulnerable populations during this cost-of-living crisis is essential. This financing package strengthens our partnership with Nigeria and showcases efforts that can serve as an example for Africa.”
The World Bank’s support comes through the International Development Association (IDA), its arm dedicated to assisting the world’s poorest countries. The $2.25 billion package is offered on highly concessional terms, featuring a 40-year loan repayment period and a very low interest rate of just over 1%.
This significant financial backing from the World Bank demonstrates confidence in Nigeria’s economic reform plans. The combined efforts of the government and the World Bank aim to place Nigeria on a path towards a more stable and prosperous future.
