World Bank approves loan of $2.25bn amidst Nigeria’s rising debt profile

Despite Nigeria’s growing debt load, the World Bank has authorised a $2.25 billion lending facility to support President Bola Ahmed Tinubu’s economic reforms.

This was revealed in a statement released on Thursday by Finance Minister Wale Edun.

According to Edun, the loan will be used to finance two important economic initiatives, the NG Accelerating Resource Mobilisation Reforms Programme-for-Results (ARMOUR) and the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET), with financing proposals of $1.5 billion and $750 million, respectively.

He said that the loans are a component of President Tinubu’s continuous initiatives to help the weak and impoverished, stabilise the economy, and realign it for inclusive and long-term prosperity.

“To restore macroeconomic stability and set Nigeria on a path to sustainable and inclusive economic growth, we have implemented the necessary and audacious changes. In a statement issued by the Ministry of Finance on Thursday, Edun said, “We welcome the support of the RESET and ARMOUR programmes as we further consolidate and implement our policy reforms, consistent with accelerating investment and using public resources more sustainably to achieve our development goals.”

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The World Bank Vice President for Western and Central Africa, Ousmane Diagana, made the statement claiming that Nigeria’s extensive macro-fiscal reforms are setting the nation on a new course that may stabilise the economy and help pull its citizens out of poverty.

To lessen the effects of the cost-of-living crisis, it is crucial to keep up the momentum of these reforms and to keep helping the weak and impoverished. By supporting initiatives to revitalise the economy and hasten the reduction of poverty, this finance package fortifies the World Bank’s close collaboration with Nigeria and sets an example for the continent.

Recall that in April, during the World Bank and IMF’s spring meetings, Finance Minister Edun declared his aim to obtain the loan.

This development occurs at a time when the Debt Management Office estimates that Nigeria’s overall debt stock at the end of 2023 was N97.341 trillion.

By the end of 2023, Nigeria’s foreign debt accounted for N38.22 trillion, or 39% of the country’s overall debt stock.

The removal of fuel subsidies and the floating of the Naira as two of Tinubu’s twin reforms caused economic suffering among Nigerians.