The Federal Government on Saturday said that the World Bank will soon release the $1.5bn concessionary loan to support budget funding soon.
The Minister of Finance, Wale Edun confirmed the development during a press briefing on the sidelines of the annual meetings of the World Bank and International Monetary Fund (IMF).
Recall that in 2020, the World Bank also approved a $1.5bn credit facility for Nigeria to enable it bridge budget funding gap for the pandemic year when the country faced sharp fall in oil prices and the economy jumped into a difficult recession.
Speaking on the new loan, Edun confirmed ongoing talks with the World Bank for the loan and added that the money will likely be released soon.
Edun who said the loan request will possibly be discussed as the Federal Executive Council meets on Monday, added that it will come with a near zero interest rate, dousing concerns around rising debt service obligations.
He said, “Talks with the World Bank on $1.5 billion budget support, is correct. The World Bank is the number one multilateral development bank for helping developing countries fund own projects and programs. It has free money through International Development Association (IDA).
“It has this for the poorer countries and right now I think we qualify as one of the countries that are almost in the normal window of the World Bank funding but also some concessionary IDA funding.
“That means that effectively, the interest rate will be zero. Therefore, there is no stigma at all attached with qualifying for a World Bank funding to help finance development.
“In this particular case, its long been in the pipeline, and we are hoping that that funding will come through soon. A lot of hard work is being done. There’s a Federal Executive Council meeting on Monday that should be able to discuss this as well as other initiatives for financing of reasonable term.
“We’ve talked about the high costs of money, but the World bank money is the cheapest.”
On the priority of government, he said the key focus remains providing a better life for all Nigerians.
The Minister added, “The various discussions we have had with institutions such as the International Monetary and Finance Committee (IMF), the International Finance Corporation, the Islamic Development Bank and the British Government, to name a few, show that domestic revenue mobilization is a critical component of Nigeria’s long-term path to sustainable development finance.
“The Nigerian economy is not immune to these global headwinds and the overall geopolitical fragmentations. Fiscal consolidation remains the preferred policy option for many countries, so that buffers can be built after long years of stimulus.”