Wale Edun, the minister of finance and coordinating minister of the economy, says the federal executive council (FEC) has approved a $1.58 billion loan request.
Edun said the loan request is split into two; $1.5 billion from the World Bank and $80 million from the African Development Bank (AfDB).
The minister revealed the approval after the FEC meeting held at the presidential villa, Abuja, on Monday.
He told the state house correspondents that the $1.5 billion from the World Bank would be applied through the International Development Association (IDA) – an arm of the Bretton Woods institution, which provides free or zero-interest loans to low-income countries.
We also approved today the application for financing from the World Bank. And in particular, the International Development Association which is really the virtually free or zero interest lending arm or financing arm of the World Bank,” he said.
“The total is $1.5 billion. And the background is just as you heard from the Minister of planning and budget.”
The loan, according to Edun, comes at a time cost of borrowing is rising as developed countries raise interest rates and restrict money, to fight inflation.
What that means is that interest rates for everybody else, become not just high but very painful, if not on (sic) affordable within that context,” he said.
Edun said the World Bank is willing to lend to Nigeria because of some tough policies made by President Bola Tinubu.
He said the tough decisions have received the support of the multilateral development bank, and as a result, the World Bank is ready to “process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly”.
Commenting on the $80 million loan from AfDB, Edun said the fund will be used to finance the Ekiti Knowledge Zone (EKZ) project.
He said the project was created to provide technological skills to the youths in Ekiti, as the contribution of the technology sector to the economy is rising.