Nigeria’s $1.5bn budget support loan request is “still in the works,” says World Bank Country Director for Nigeria, Shubham Chaudhuri.
Chaudhuri made the disclosure on Thursday in the presentation of the World Bank Nigeria Development Update for December.
The report, ‘Rising to the Challenge: Nigeria’s COVID response’ took stock of recently implemented reforms and proposed policy options to mitigate the impact of COVID-19 and foster a resilient, sustainable and inclusive recovery.
Chaudhuri hinted that the loan request was taking so long because the bank still had 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 $10bn or $15bn hole, $1.5bn is just a little bit of that, the question is how is the rest of that hole being made up?
“What is 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 $1.5bn 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 explained.
He, however, clarified that the $1.5bn slated for presentation to the bank’s board for approval on December 14 was not the $1.5bn for budget support, but two separate $750m credit to support state government efforts.
“So, one is additional financing for the State’s Fiscal Transparency Accountability and Sustainability programme for results.
“The other is the Nigeria COVID-19 Action Recovery and Economic Stimulus 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,” he added.
