FG Ready For World Bank’s $1.5bn Budget Support Loan – Wale Edun
Despite concerns over the country’s disturbing debt profile, the Federal Government says obtaining the $1.5 billion budget support facility from the World Bank remains a top priority for driving its economic growth agenda.
Accordingly, talks are progressing well with the global Bank to access the facility for the purpose of financing the country’s budget, according to the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun.
The Minister confirmed the development at the weekend during the briefing by Nigeria’s delegation on the sideline of the International Monetary Fund (IMF)/World Bank Annual Meeting in Marrakech, Morocco.
“On the talks with the World Bank on $1.5 billion budget support; that is correct. It has free money through the International Development Association (IDA). It is for the poorer countries; and right now, I think we qualify as one of the countries that can borrow in the normal window of World Bank funding but also some concessionary IDA funding, and that means that effectively, the interest rate will be zero”, Mr Edun said.
Arguing that no stigma is attached to Nigeria’s qualification to access the World Bank funding in financing development, the Minister said; “In this particular case, it has long been in the pipeline, and we are hoping that funding would come through soon.
“There is a Federal Executive Council meeting on Monday that should be able to discuss this, as well as other initiatives for financing on reasonable terms. We have talked about the high costs of money, the World Bank money is the cheapest.”
Mr Edun, who spoke about Nigeria’s high debt service ratio, said the government is really concerned and working on modalities to address the worrying issue going forward.
He stated thus; “I think that in terms of debt restructuring, I agree with you that you don’t have to wait; what you do is to look for opportunities to maybe lengthen debt, improve the condition under which that debt is borrowed.”
Also addressing speculations that the IMF is advising an increase in taxes and interest rates as part of measures to improve the country’s revenue profile, the Finance Minister said Nigeria has no loan programme in the offing with the financing body, and as such he was not privy to where such proposal was made concerning increase taxes and interest rates.
The Minister also spoke on engaging the Central Bank of Nigeria (CBN) to fund the budget, said; “Regarding Ways and Means, President Bola Ahmed Tinubu has a commitment not to go beyond the statutory limits.”
With assurances that the monetary and fiscal authorities would work together, Mr Edun stated thus; “Monetary policy that’s talking about tightening the money supply that increases interest rates and on the fiscal side government expenditure includes paying the interest and the principal on government debt.”
As the number one multilateral development bank on the global stage, the World Bank has been assisting developing countries as well as funding developing countries’ projects and programmes, especially in the economic and finance sectors.
