By Francis Ogwo
As a move towards helping Nigeria recover from its current recession and the downturn posed on its economy by the novel COVID-19, the World Bank has approved its request for a $1.5 billion loan.
This information was made public on Tuesday in a statement the World Bank’s Country Director for Nigeria, Shubham Chaudhuri in which he stated that the facility is a five-year Country Partnership Framework (CPF) for a three-year duration from 2021 to 2024.
“This Country Partnership Framework will guide our engagement for the next 5 years in supporting the Government of Nigeria’s strategic priorities by taking a phased and adaptive approach,” Chaudhuri added.
According to reports, two projects got the approval from the World Bank Board of Directors which include: Nigeria Covid-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES) and the State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS).
The statement noted that the CPF will focus on four areas of engagement which include investing in human capital by increasing access to basic education, quality water, and sanitation services; improving primary healthcare; and increasing the coverage and effectiveness of social assistance programs.
It will also target jobs creation through the strengthening of private sector, with a focus on power generation for smallholder firms and families.
Further details from the World Bank stated that part of the focus of the CPF would be a focus on enhancing digital infrastructure, and developing economic corridors and smart cities, which would impact positively on the living standards of Nigerians.
Part of the statement justifying the loan said:
“With the sharp fall in oil prices as a result of COVID-19, the economy is projected to contract by over 4% in 2020, plunging the country into its deepest recession since the 1980s. Government revenues could fall by more than 15 billion dollars this year, and the crisis will push an additional 5million Nigerians into poverty in 2020,” the statement read in part.
The World Bank noted that the facility was prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
On the condition for the loan approval, World Bank country director for Nigeria, Shubham Chaudhuri had earlier said Nigeria needs more monetary reform in order to access $1.5 billion loan.
The loan was then delayed with Chaudhuri saying Nigeria needs to carry out more currency reform and make plans for sustainability in later years.
“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,” he said.
This CPF proposes a collaborative approach of how resources across the entire Bank Group can best support the Government’s effort to achieve its goal to lift 100 million citizens out of poverty.
“The Country Partnership Framework leverages the World Bank Group to enable business growth that is inclusive and sustainable,” IFC Director for Southern Africa and Nigeria, Kevin Njiraini also said.
He observed that the the loan was then delayed owing to Nigeria’s currency reforms with a later sustainability plan.
Recall that economic induces revealed that Nigreria’s economy dropped by 6.1 percent in the second quarter , indicating that two consecutive quarters of negative growth have been recorded in 2020.
This variables from the Nigerian Bureau of Statistics concluded that with the two consecutive quarters of economic contraction, Nigeria – Africa’s largest economy officially slipped into recession.
This was sequel to the dwindling fortunes of the country with the shutdown of the economy as a containment measure against the ravaging COVID-19 pandemic.
