The Federal Government on Monday said it had secured a budget support loan worth $1.5bn from the World Bank and another worth $80m from the African Development Bank to finance various projects in critical sectors of the economy.
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.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told State House Correspondents that the FG would receive $1.5bn as a whole before the end of the year, provided it fulfilled its end of the deal.
He explained, “Council approved today the application for financing from the World Bank. And in particular, the International Development Association, which is the virtually free or zero-interest lending arm or financing arm of the World Bank.
“The total is $1.5bn. The world today is one of the high-interest rates as the developed world looks to fight inflation. They do it by restricting money, and keeping interest rates high so that you can get inflation down.
“That means that interest rates for everybody else become not just high but very painful, if not unaffordable within that context.”
Edun clarified that Nigeria took macroeconomic moves and tough decisions to restore balance in its economy, warranting support from multilateral development banks.
“The bold, brave, courageous and decisive measures that Mr President has taken are 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 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,” said Edun.
The former Lagos Finance Commissioner said lags would exist between the cause and effect of the recent reform.
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,” he noted.
The Finance Minister also revealed that the Council approved $80m financing from the African Development Bank.
The council members will be split into 10 subcommittees on consumer credit, commodity exchange, heavy industries and steel development, trade facilitation and ease of doing business.
Others are subcommittees on licensing and certification of artisans, trade facilitation and realisation, mining and solid minerals, oil and gas and creative industries.
Uzoka-Anite said the subcommittees on defence, industries and pharmaceutical were stepped down.
The FEC also approved the creation of a committee to review the Free Trade Zone setup.
This committee will ‘look at the setup, look at incentives, look at the laws and the reforms and come up with reforms that will help to stimulate and catalyse the economic benefits of the free trade zones and special economic zones,” the Minister explained.
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