Minister of Finance and Coordinating Minister for the Economy, Wale Edun on Saturday confirmed ongoing talks with the World Bank for a $1.5 billion concessionary loan to support budget funding, and signaled that the money will likely come in soon.
Edun who confirmed the development during a press meeting on the sidelines of the annual meetings of the World Bank and International Monetary Fund (IMF) said the loan request will possibly be discussed as the Federal Executive Council meets on Monday.
The minister said talks on the loan request had progressed for some time now and that it will come with a near zero interest rate, dousing concerns around rising debt service obligations.
He said: “Talks with the World Bank on $1.5 billion budget support, is correct. The World Bank is the number one multilateral development bank for helping developing countries fund own projects and programs. It has free money through International Development Association (IDA).
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“It has this for the poorer countries and right now I think we qualify as one of the countries that are almost in the normal window of the World Bank funding but also some concessionary IDA funding.
“That means that effectively, the interest rate will be zero. Therefore, there is no stigma at all attached with qualifying for a World Bank funding to help finance development.
In this particular case, its long been in the pipeline, and we are hoping that that funding will come through soon. A lot of hard work is being done. There’s a Federal Executive Council meeting on Monday that should be able to discuss this as well as other initiatives for financing of reasonable term.
“We’ve talked about the high costs of money, but the World bank money is the cheapest.”
In 2020, the World Bank also approved a $1.5 billion credit facility for Nigeria to enable it bridge budget funding gap for the pandemic year when the country faced sharp fall in oil prices and the economy jumped into a difficult recession.
Nigeria equally secured $3.4 billion facility from the International Monetary Fund (IMF) in emergency financial assistance under the its Rapid Financing Instrument.