Nigeria secures $9b loans from World Bank

The World Bank’s Nigeria Country Director, Shubham Chaudhuri has disclosed that in the last 30 months, Nigeria has borrowed $9 billion from the World Bank at highly concessionary rates. He made this known in Abuja on Thusday at the launch of the World Bank’s Nigeria Development Update (NDU) and Country Economic Memorandum.

Chaudhuri said the bank’s mission in Nigeria, “is to help the host country eliminate poverty and make life better”.

The World Bank, he said, has been able to attract funds in excess of $9 billion for financing into Nigeria in the past 30 months on concessionary rates.

According to him, “these funds are not donations; they are highly concessionary. We should be seen as trust partners. Whatever we can do to help Nigeria, we will do”.

The NDU report he said, “is part of the help, Nigeria’s future is full of potential and how it can get there. We are here as a partner. We will provide advice; we will never dictate”.

The World Bank country Director for Nigeria stressed the importance of adopting a single and market reflective exchange rate and a stop to fuel subsidy amongst other reforms the Bretton Wood Institution would want Nigeria to undertake.

These reforms, Shubham Chaudhuri said, should be carried out if Nigeria is keen on charting an economic growth from the current situation.

The Nigeria Development Update (NDU) and Country Economic Memorandum describes the main trends, challenges, and opportunities for growth and job creation in Nigeria over the past 20 years; and proposes a path forward with actionable policy options.

Specifically, the report noted that “unlocking private investment will enable creation of more and better-quality jobs in a sustainable manner”.

The report emphasised that Nigeria can achieve economic growth again if it implements a comprehensive set of bold reforms in a timely manner.

Other reforms suggested by the World Bank to the Nigeria government are: increase in non-oil revenues by raising Value Added Tax (VAT) and strengthen tax reforms; containing inflation by reducing Federal Government’s recourse to CBN financing; reduce insecurity by strengthening rule of law; facilitate trade and boost domestic value by removing import and foreign exchange restrictions.

Others are; increasing access to finance by strengthening institutional infrastructure for financial intermediation and boosting power generation by investing in infrastructure to reduce technical and commercial losses amongst others.

The Minister of Finance, Budget and National Planning Mrs. Zainab Ahmed represented by the Director General, Budget Office of the Federation Mr. Ben Akabueze, said the launch of NDU report was another opportunity for Nigeria to review critical challenges confronting the economy and used the opportunity to commended the World Bank for its various policy advocacy and support to Nigeria.

She said the government has embarked on a number of reforms especially in the areas of revenue generation in the non-oil sector with the launch of Strategic Revenue Growth Initiative (SRGI).

Ahmed noted that with the launch of the SRGI, “government revenue from the non-oil sector has recorded improved performance. She listed measures adopted by the government to curtail oil theft in oil producing areas as one of such attempts at improving revenue generation.

She assured the World Bank that importation of refined fuel will reduce drastically next year when Dangote refinery comes on board in addition to the current effort to activate both Kaduna and Port Harcourt refineries in 2023.

She appealed to the international investment community that “the federal government and sub-national government alone can’t provide all the funding we need. We need the private sector- foreign and local in securing the much-needed investment”.

At the plenary session Special Adviser to the President on Finance and the Economy Dr. Sarah Alade said whatever can be done to achieve a working economy in which investors’ confidence is guaranteed is now imperative.

“The confidence in the market is very low. The first thing we should do is to restore macroeconomic stability. We have to do urgent reforms. We can’t grow the economy by ourselves, we need to restore order both in the capital market and money market and the time is now”, Dr. Alade said.

On his part, Kaduna state governor Mallam Nasir El-Rufai said states were at the receiving end of fiscal pressures.

According to him, “since 2021, NNPCL has stopped contributing a cent into the federation purse. They claimed that the entire domestic oil revenue is not enough to cure fuel subsidy debt. We saw this problem coming at the National Economic Council (NEC) meeting in March 2021. We raised red flags. Now most states, except Lagos and those collecting 13 percent derivation are under pressure”.

He warned that if care was not taken, a 2014 to 2015 scenario in which the federal government bailed out the states will repeat itself.

El- Rufai said the reforms specified by the World Bank must be implemented immediately and urgently, adding that, “we don’t need the World Bank to tell us”.

Edo state governor Mr. Godwin Obaseki said the government’s policies must be tailored to encourage private sector investment. “It’s either we grow our potential or things will fall apart”.

On his part, former President of Manufacturers Association of Nigeria (MAN) Engr. Mansur Ahmed warned the government against committing additional funds into rehabilitation of refineries, instead he advised the government to sell the existing refineries.

-The Nation