In a significant development, the World Bank has initiated the payment process for the $800 million approved for Nigeria’s National Social Safety Net Program-Scale Up. According to reliable sources, the World Bank has already disbursed approximately $299.99 million to Nigeria under the National Social Safety Net Programme-Scale Up, which was approved on December 16, 2021.
Documents obtained from the World Bank confirm the recent disbursement, marking a milestone in the implementation of the social safety net program. With 37.5 percent of the total loan disbursed, there remains a pending balance of about $442.88 million.
The $800 million social safety net program is designed as a conditional cash transfer, scheduled to be executed by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation. This initiative aims to implement a monthly cash transfer program for poor and vulnerable Nigerians, particularly those adversely affected by recent policies such as the fuel subsidy removal.
In a significant development, President Bola Tinubu formally launched the conditional cash transfer program in October 2023. The program is targeted at assisting 15 million households nationwide, with each household expected to receive N75,000 within three months.
The Federal Government is actively seeking the services of a consulting firm to enhance the system for the cash transfer program. The upgrade, as outlined in the document, includes the development, implementation, deployment, and maintenance of a user-friendly, interactive, web-based Management Information System (MIS). This upgrade is crucial as the National Economic Council decided not to use the social register from the previous administration due to credibility issues.
The financing agreement document specifies the repayment terms for the $800 million loan obtained by the Federal Government. Repayments will be made in installments, with the first payment due on January 15, 2027, and the final payment scheduled for July 15, 2051. The repayment structure includes a commitment charge rate, a service charge, and an interest charge, with the percentage of the principal amount increasing over time.
While the commitment charge rate is set at one-half of one percent per annum on the Unwithdrawn Financing Balance, the service charge is three-fourths of one percent per annum on the withdrawn credit balance. The interest charge is fixed at one and a quarter percent per annum on the withdrawn credit balance. Additionally, a percentage of the principal amount will be paid alongside other charges, gradually increasing from 1.65 percent for the first payment to 3.40 percent for the last payment.
This disbursement and ongoing efforts to enhance the cash transfer program signify a positive step towards addressing the economic challenges faced by vulnerable populations in Nigeria. The Federal Government’s commitment to providing targeted financial assistance is expected to alleviate the impact of recent economic policies on the country’s most disadvantaged citizens.
