Nigeria is seeking financial assistance of up to $1.5 billion from the World Bank. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared this insight in an interview with Bloomberg TV during the World Economic Forum in Davos, Switzerland.
Edun expressed optimism about securing the support from the World Bank, stating, “We’re hoping to get $1 billion or $1.5 billion from the World Bank for budgetary support. It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”
The funds are intended to provide budgetary support, alleviate dollar shortages, and contribute to the ongoing economic reforms initiated by President Bola Tinubu. The removal of the costly petrol subsidy and the lifting of currency controls were among the key measures implemented by President Tinubu to salvage the country’s economic situation.
Despite these reforms, inflation in Nigeria has surged to double-digits, reaching the highest level in at least two decades. The removal of the petrol subsidy led to a triple increase in the petrol price, impacting public transportation costs and causing fare hikes for buses, tricycles, and motorcycles.
Nigeria last tapped into the international debt market in March 2022, raising $1.25 billion through a seven-year Eurobond. Minister Edun hinted at the possibility of Nigeria returning to the Eurobond market later in the year, depending on favorable market conditions.
Edun emphasized the deserving nature of Nigeria’s request for financial support, citing the government’s efforts in fuel subsidy removal and foreign-exchange market reforms. He stated, “What we’ve done with fuel subsidies, what we have done in terms of the foreign-exchange market reform, deserve support. We’ve done enough and we deserve to be rewarded imminently.”
The country’s inflation rate, as reported by the National Bureau of Statistics, rose to 28.92 percent in December, adding pressure on consumers grappling with weakened purchasing power and businesses facing higher operating costs. The government is now looking to stabilize the naira, primarily by increasing oil revenue.
To address the current backlog, estimated at about $5 billion, Edun expressed confidence in clearing it through efforts to boost oil revenue and mobilize dollars within the economy. He highlighted the importance of stabilizing the naira and exploring avenues to tap into domestic dollar savings.
As Nigeria navigates economic challenges, the requested financial support from the World Bank remains a crucial component in the government’s broader strategy to stabilize the economy, ensure liquidity, and pave the way for sustainable growth.
