The World Bank has approved a $2.25 billion loan to support Nigeria’s economic reform and stabilize its economy. The loan is divided into two programs: $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF) and $750 million for the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR).
“This joint $2.25 billion package provides urgent financial and technical support to Nigeria’s immediate efforts to stabilize the economy and scale up support to the poor and most economically at risk.”
According to the World Bank, the loan will provide immediate financial and technical support to Nigeria’s efforts to stabilize the economy, scale up support to the poor and most economically at risk, and raise non-oil revenues to promote fiscal sustainability. The bank acknowledged that Nigeria has taken critical steps to restore macroeconomic stability, boost revenues, and create conditions for growth and poverty reduction.
The bank identified the steps taken by President Bola Tinubu’s government to include “unifying the multiple official exchange rates and fostering a market-determined official rate, as well as sharply adjusting gasoline prices to begin to phase out the costly, regressive, and opaque gasoline subsidy.”
The bank said the Central Bank of Nigeria (CBN) has refocused on its core mandate of price stability and is tightening monetary policy including by increasing interest rates, as is appropriate to reduce inflation.
The loan will support Nigeria’s efforts to implement tax and excise reforms, strengthen tax revenue and customs administrations, and safeguard oil revenues. The World Bank Vice President for Western and Central Africa, Ousmane Diagana, praised Nigeria’s concerted efforts to implement macro-fiscal reforms, which he believes will stabilize the economy and lift people out of poverty.
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, welcomed the support of the RESET and ARMOR programs, which he believes will help consolidate and implement macro-fiscal and social protection policy reforms. The loan is part of the World Bank’s strong partnership with Nigeria to reinvigorate its economy and fast-track poverty reduction.
