The World Bank has confirmed the approval of the sum of $2.25 billion to support the Nigerian government’s economic reform.
The global bank in a statement where it confirmed the approval of the money said that it approved $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 combined $2.25 billion package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilize the economy and scale up support to the poor and most economically at risk.
“It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services,” the bank said.
The World Bank in the statement captioned ‘Supporting Nigeria’s Homegrown Reforms: New World Bank Financing for Inclusive Growth and Revenue Diversification’, noted that Nigeria, which is confronted with a fragile economic situation, “recognised the urgency of changing course and embarked on critical reforms to address economic distortions and strengthen the fiscal outlook.”
The global bank said that initial critical steps to restore macroeconomic stability, boost revenues, and create the conditions to reignite growth and poverty reduction have been taken.
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.
According to the World Bank, a targeted cash transfer program is being rolled out to cushion the impact of high inflation on the poor and economically insecure households.
The global bank quoted Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, as saying, “We have embarked on bold and necessary reforms to restore macroeconomic stability and put the country back on a sustainable and inclusive economic growth path that will create quality jobs and economic opportunities for all Nigerians.
“We welcome the support of the RESET and ARMOR programs as we further consolidate and implement our macro-fiscal and social protection policy reforms, consistent with accelerating investment and redirecting public resources sustainably to achieve development priorities.”
The World Bank Vice President for Western and Central Africa, Ousmane Diagana, said, “Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty.
“It is critical to sustain the reform momentum and continue to scale up and expand protection to the poor and economically at risk to cushion the effects of cost-of-living pressures on citizens.
“This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”
The bank stressed that the RESET DPF is focused on supporting Nigeria to strengthen its economic policy framework by creating fiscal space and protecting the poor and economically insecure.
On the other hand, the ARMOR PforR will support efforts to implement tax and excise reforms, strengthen tax revenue and customs administrations, and safeguard oil revenues.