World Bank chief in Nigeria Shubham Chaudhuri with Governor Seyi Makinde |
Chaudhuri said this on Thursday in Abuja, at a media
conference on the presentation of the World Bank Nigeria Development Update
(NDU) for December.
The report titled “Rising to the Challenge: Nigeria’s COVID
response” took stock of recently implemented reforms and proposes policy options
to mitigate the impact of COVID-19 and foster a resilient, sustainable and
inclusive recovery.
Chaudhuri said that the loan request was taking so long
because, irrespective of the bold actions taken by the government in the form
of reforms to cushion the effects of the pandemic, the bank has its
reservations.
“I think the way that our board and our shareholders have
approached this budget support, is really to say has the country that is
requesting the support done all it can to help itself?
“Think of it this way, when you have say a 10 or 15 billion
dollar hole, 1.5 billion dollars is just a little bit of that, the question is
how is the rest of that hole being made up?
“What is the sustainability in 2021 and beyond? And that is
why we are thinking about the overall prospects going forward, in terms of the
macro adequacy and the flexibility and exchange rate management.
“That is why our shareholders and our management are still
saying we recognise how much Nigeria has done, but for this 1.5 billion dollars
to really be a part of the larger effort to put Nigeria on a sound macro-fiscal
footing going forward, there needs to be a little bit more.”
Chaudhuri, however, said that the 1.5 billion dollars slated
for presentation to the Bank’s board for approval on Dec. 14 was not the 1.5
billion dollars for budget support, but two separate 750 million dollar credit
to support state government efforts.
He added that one of them was for the state’s fiscal
resources, but under a performance based mechanism.
“So, one is additional financing for the State’s Fiscal
Transparency Accountability and Sustainability (SFTAS) programme for results.
“The other is the Nigeria COVID-19 Action Recovery and
Economic Stimulus (CARES) Programme, which is meant to support the states
towards protecting livelihoods, enhancing food security and supporting local
economic activity.
“So those are the two operations that are being considered
by our board on Monday.”
As for the bank’s portfolio investment in Nigeria, he said
after the 1.5 billion dollars states support credit, it would amount to 11.5
billion dollars.
Giving a breakdown, he said there were three different ways
of measuring the size of the bank’s portfolio, first was how much concessional
financing was being provided.
“Yes, we are providing credits and not grants to support the
government’s budget, but it is highly concessional, usually 20-30 years
maturities, 10 years grace period and at highly concessional rates of about 1
to 2 per cent.
“So if you look at how much of that the board has approved,
in terms of this financing, the board has as of July 2018 approved seven
billion and in the last two years up to now, it has approved another three
billion in financing so that brings us to 10 billion dollars and then the 1.5
billion dollars that is being considered in December that will bring us to 11.5
billion dollars the board has approved.”
The World Bank chief said that in active disbursements, the
bank had disbursed seven billion dollars as at July 2018.
He added the bank’s board, in July, also approved 500
million dollars for the Adult and Girls Initiative for Learning and Empowerment
(AGILE) programme, under the Global Financing Facility.
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