World Bank Loan To Nigeria Rises To $10bn; Clarifies $800m Subsidy Loan

The World Bank Country Director in Nigeria, Dr Shubham Chaudhuri has announced that the concessionary loans to the country stand at $10 billion.

Concessional finance, the Bank said on its website, is below-market-rate finance provided by major financial institutions, such as development banks and multilateral funds, to developing countries to accelerate development objectives.

It targets high-impact projects responding to globally significant development challenges – from climate change mitigation and resilience to vaccine deployment, water sanitation, and education – that otherwise could not go ahead without specialised financial support.

The Bank has also revealed that the $800 million meant for the provision of palliatives to Nigerians due to the removal of fuel subsidy was approved in 2021.

Recall that the immediate past government of President Muhammadu Buhari had applied for a loan from the Bank ahead of its plan to remove subsidy by June this year.

The issue become controversial after the administration exited on May 29, 2023, without ending fuel subsidy as promised.

The Buhari administration said it was left for the successive administration to decide whether to end the multi-billion subsidy regime.

The incumbent President Bola Ahmed Tinubu had since ended the subsidy on petrol amidst questions on what has happened to the loan from the Bretton Wood, United States of America-based organization.

Chauduri who made the clarification about the $800 million loan on Tuesday in Abuja, during a programme to assess the nation’s economy in the last six months of the year, explained that the funds will be channeled into ameliorating the sufferings of poor and vulnerable Nigerians owing to the removal of the fuel subsidy.

The world bank chief also appealed to Nigerians to accept the removal of the subsidy on petrol, adding that the measure is necessary to rebuild the nation’s struggling economy.

He said the federal government must ensure that the palliatives meant to cushion the effect of the removal are well implemented to reduce the pains arising from the policy.

Zainab Ahmed, the immediate past Minister of Finance and National Planning while speaking about the loan in April said 50 million Nigerians will benefit from the loan, by receiving N5000 each for a six months period.

According to her, “The $800 million has been negotiated and approved by the federal executive council (FEC) and we now have a request before the parliament for approval. And once the parliament approves it, we will roll it out.

“We have also been doing preparatory work side by side along the approval process. And that includes the building of the social register which will be used for the electronic transfers of the funds.

“We needed to have this ready because when the government eventually removes fuel subsidy, there will be an immediate transport palliative that will be provided to the most vulnerable members of our society who have been identified, registered, and now contained in our national social register.

“This effort is led by the ministry of humanitarian affairs, disaster management, and social development. They developed that register with the support of the World Bank. The register has about 10 million households and that is an equivalent of 50 million Nigerians,” Zainab said.