Says $800m Loan To Nigeria Was Approved December 2021
The World Bank has predicted that the Federal Government will save N2 trillion in the remaining six months of 2023 with the removal of petrol subsidy and over N11 trillion by 2025.
The World Bank made this projection in its June 2023 Nigeria Development Update released on Tuesday in Abuja.
According to the NDU report, the removal of the petrol subsidy and FX management reforms are vital steps toward rebuilding fiscal space and restoring macroeconomic stability.
The report emphasised the need for further policy reform measures and acknowledges the critical reforms that the new administration has already initiated to address macroeconomic imbalances.
It advised President Bola Ahmed Tinubu to take advantage of the opportunity to have a transformative impact on millions of Nigerians and establish a solid foundation for sustainable and inclusive growth.
The NDU recommended implementing a comprehensive reform package, including a new social compact to protect the poor and vulnerable towards maximising the collective impact on growth, job creation, and poverty reduction.
World Bank Country Director for Nigeria, Shubham Chaudhuri, commended the Tinubu government’s efforts to implement long-awaited reforms and emphasised the need for compensatory actions to mitigate the short-term impact on the poor.
Chaudhuri also advocated for the implementation of a cash transfer programme to provide relief to those most affected by higher petrol prices as part of a broader agreement to redirect fiscal resources towards development priorities.
Also Chaudhuri clarified that the 800 million dollar loan from the bank was approved as of December 2021, a time when the government of Muhammadu Buhari contemplated the removal of fuel subsidy.
Its Nigerian articles Country Director, Dr Shubham Chaudhuri, made this known on Tuesday at an event organised by the World Bank to assess the nation’s economy in the last six months.
Chaudhuri explained that the fund is a loan and not a grant as speculated.
He said that the funds will be channelled into ameliorating the sufferings of the poor and vulnerable owing to the removal of the fuel subsidy.
The loan was delayed as Former President Muhammadu Buhari soft-pedaled on the fuel subsidy removal until his last days in office.
Few weeks to his handover, Buhari had sent a letter to the Senate seeking approval to take a loan to the tune of $800 million from the World Bank to cushion the effects of subsidy removal.
The former Minister of Finance, Budget and National Planning, Zainab Ahmed, had said that the disbursement of the fund is in light of the planned subsidy removal in June 2023.
On his inauguration on May 29, President Bola Tinubu eventually announced the removal of the petrol subsidy.
The Nigerian Petroleum Company (NNPC) Limited, 48 hours after Tinubu’s declaration, announced price adjustment for petrol.
The World Bank Country Director also expressed support for the Federal Government’s subsidy removal and the exchange rate unification.
According to Chaudhuri, the policy though painful remains key to rebuilding the economy of the nation.