The World Bank yesterday approved a total sum of $2.25 billion for Nigeria to enable the federal government to sustain its reform momentum, accelerate non-oil resource mobilisation, and support poor Nigerians.
In two separate financing interventions, the bank announced $1.5 billion for the country’s Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme (DPF) and $750 million for the Accelerating Resource Mobilisation Reforms (ARMOR) Programme-for-Results (PforR).
The World Bank said the combined package provided immediate financial and technical support to the country’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk.
The intervention further sought to support 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.
Confronted with a fragile economic situation, Nigeria recognised the urgency of changing course and embarked on critical reforms to address economic distortions and strengthen the fiscal outlook.
The bank noted that the government had taken initial critical steps to restore macroeconomic stability, boost revenues, and create the conditions to reignite growth and poverty reduction, adding that “these 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 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. A targeted cash transfer program is being rolled out to cushion the impact of high inflation on the poor and economically insecure households,” the bank stated.
“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,” said Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy. “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.”
“Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilise 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,” said Ousmane Diagana, the World Bank Vice President for Western and Central Africa. “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 RESET DPF is focused on supporting Nigeria strengthen its economic policy framework by creating fiscal space and protecting the poor and economically insecure. The ARMOR PforR will support efforts to implement tax and excise reforms, strengthen tax revenue and customs administrations, and safeguard oil revenues,” World Bank noted further.
