The World Bank has released a $1.5 billion loan to Nigeria following the removal of subsidy on petrol and introduction of the tax reform bills.
The bank said it had approved two operations: $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF) and $750 million for the Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR).
The new financial aid is designed to provide immediate financial and technical assistance to Nigeria, stabilise the economy and increase support for the poor people in the country,
Also, the loan will support Nigeria’s effort to increase non-oil revenue, promote fiscal sustainability and provide sufficient resources that will deliver quality services to the citizens of the country.
In addition, the new loan comes in two tranches with different maturity periods; the first tranche is valued at $750 million with a 12 year maturity period and a six year grace period. Meanwhile, the second tranche, a $750m loan from the International Bank for Reconstruction and Development, has a 24-year repayment period with an 11-year grace period.
The first tranche of $750m was disbursed on July 2, 2024, while the second tranche, tied to the fulfilment of specific economic reform conditions like subsidy removal and tax reform, was disbursed in November 2024.
The subsidy removal and floating of the currency has spiked inflation to its highest level in 28 years, with some analysts criticising the government for always listening to the economic dictates of the so-called Brenton Wood institutions.
