Nigeria Secures $2.25 Billion World Bank Loan to Support Reforms Amid Economic Hardship

Nigeria Secures $2.25 Billion World Bank Loan to Support Reforms Amid Economic Hardship
Workers unload sacks of grain from a truck at a market in Gombe, Nigeria, June 3, 2024. - Copyright © africanews Sunday Alamba/Copyright 2024 The AP. All rights reserved

Nigeria receives approval from the World Bank for a $2.25 billion loan to support economic reforms and reduce poverty.

The World Bank has authorized a $2.25 billion loan to help continuing economic reforms and address revenue difficulties in Nigeria, a key step toward strengthening the country’s economy. This funding is provided at a time when Nigeria is experiencing the worst cost-of-living crisis in recent memory.

A $1.5 billion portion of the loan will be used to safeguard millions of Nigerians who have been more severely impacted by poverty since President Bola Tinubu took office, the World Bank said on Thursday. Tinubu has revived the flagging economy of the country by enacting a number of extreme measures.

A further $750 million of the loan will be allocated to tax changes, improving revenue generation, and protecting income from oil that are vulnerable to recurrent theft and low output. These actions are essential since oil continues to play a big role in Nigeria’s economy.

Among Tinubu’s economic changes were the unification of various exchange rates and the removal of costly and long-standing fuel subsidies. Although these steps are required for long-term stability, the result has been a 28-year high in inflation. Widespread protests by people and workers about the growing cost of living have increased political pressure on the administration.

The Nigerian government declared in May that it was applying for the loan to assist its ambitious economic ambitions in response to these difficulties. The Nigerian Economic Summit Group revealed that foreign investments fell by 26.7% from $5.3 billion in 2022 to $3.9 billion in 2023. Nevertheless, the administration is still striving to draw in more of these funds.

Nigeria’s capacity to use its earnings to fund social welfare programs and public infrastructure has been hampered by its huge debt load. The government’s reliance on borrowing has contributed significantly to the roughly 1,000% increase in national debt over the last ten years.

The World Bank highlighted the significance of sustaining Tinubu’s reforms’ pace in spite of these obstacles. The World Bank’s vice president for Western and Central Africa, Ousmane Diagana, claims that these economic measures have put Nigeria on a course toward stabilization and the reduction of poverty.

A crucial milestone in Nigeria’s path to economic growth and recovery is the $2.25 billion loan. The goal of this financial package is to give the country and its citizens a more secure and prosperous future by supporting long-term reforms and attending to immediate financial demands.


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