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Nigeria gets World Bank $1.5bn loan
Nigeria gets World Bank $1.5bn loan
The World Bank has disbursed a $1.5 billion loan to Nigeria under the Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing initiative.
The loan, approved on June 13, 2024, was released in record time following Nigeria’s implementation of critical reforms, including the removal of fuel subsidies and comprehensive tax policies.
This fast disbursement contrasts with other loan programmes, which typically experience delays due to slow or partial implementation of conditions.
For instance, the World Bank has also disbursed $1.88 million of a $750 million loan for the Accelerating Resource Mobilization Reforms (ARMOR) project, approved alongside the RESET programme.
Loan disbursement timeline
- The first tranche of $750 million, a credit facility under the International Development Association (IDA) with a 12-year maturity and six-year grace period, was disbursed on July 2, 2024.
- The second tranche of $750 million, issued by the International Bank for Reconstruction and Development (IBRD) with a 24-year maturity and 11-year grace period, followed in November 2024.
The World Bank document read: “This document summarizes the progress made under the Reforms for Economic Stabilization to Enable Transformation Development Policy Financing for the Federal Republic of Nigeria (Borrower or Recipient), which was approved by the Executive Directors on June 13, 2024.
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“The DPF is a standalone operation comprised of two tranches: (1) first tranche comprising US$750 million credit from the International Development Association (Association) (Shorter Maturity Loan terms with 12-year maturity and grace period of 6 years, Credit No. 7567-NG); and (2) second tranche comprising US$750million loan from the International Bank for Reconstruction and Development (Bank) (US dollar-denominated, commitment-linked loan with 24-year maturity and grace period of 11 years, Loan No.9683-NG). The Financing Agreement and Loan Agreement were signed and declared effective on June 19, 2024 and June 26, 2024, respectively. The first tranche was released on July 2, 2024.”
Key reform conditions
A major trigger for the second tranche was the removal of fuel subsidies. The reforms allowed petrol prices to reflect international market rates and exchange rates, effectively ending implicit subsidies that strained public finances.
The deregulation, which began in mid-2023, saw petrol prices increase more than fivefold, drawing praise for fiscal discipline but sparking criticism over the rising cost of living.
The World Bank commended the government for not only meeting the condition but exceeding expectations by fully deregulating the fuel market.
The document noted: “In terms of implementation, while the TRC [Tranche Release Conditions] formulation required introducing the change over a specified time-bound implementation period, the Borrower has moved ahead and made the change immediately, thereby overachieving the TRC in this respect.
“Effective October 2024, the price of PMS has been determined by the international market and the exchange rate set by the Central Bank of Nigeria.”
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Additional reforms included the introduction of the Nigeria Tax Bill 2024, proposing a gradual increase in Value Added Tax (VAT) to 10% by 2025 and streamlining tax compliance processes.
The document read: “The Borrower has successfully carried out the program as outlined in the Letter of Development Policy, with progress along all areas supported by the DPF. Following the implementation of the reforms that constituted prior actions for the first tranche of the RESET DPF (disbursed on June 28, 2024), the Borrower continues to carry out the program as planned.
“The Borrower has prepared and submitted to the National Assembly on October 3, 2024, a comprehensive package of tax reforms, which not only reform the VAT regime but also simplify tax policy laws and tax administration.
“Reforms have also been implemented to fully deregulate the fuel market, ensuring that retail prices are determined by market conditions and opening the sector to competition. The authorities are following through on their commitment to cease deficit monetization, relying instead on standard debt instruments to finance the deficit.”
The government also submitted amendments mandating the use of the National Social Registry for social investment programmes.
Socioeconomic impact and relief measures
Despite commendations from the World Bank for exceeding reform targets, the impact of these changes has sparked public dissent. Fuel subsidy removal has led to surging transportation and living costs, triggering protests in major cities like Lagos, Kano, and Abuja.
To cushion the effects, the Federal Government introduced N25,000 monthly cash transfers for 15 million vulnerable households.
However, only about four million households have benefited so far, falling significantly short of the target. Efforts are also underway to promote compressed natural gas (CNG) as a cheaper fuel alternative, with plans to convert over one million vehicles in three years.
Nigeria gets World Bank $1.5bn loan
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Tinubu: Governors most important link to Nigeria’s development
Tinubu: Governors most important link to Nigeria’s development
President Bola Tinubu, on Wednesday in Lagos, emphasised the critical role of state governors in driving Nigeria’s development and prosperity.
He said their leadership at the subnational level was central to achieving food security, economic prosperity and rapid national growth.
The President made the remarks during a visit by Vice President Kashim Shettima and members of the Nigeria Governors Forum, NGF.
“You are the most important link to Nigeria’s prosperity and development. The Federal Government accounts for about 30 to 35 per cent of the allocated revenue; the rest comes to you.
“The agricultural value chain depends on you. You own the land, and the job is in your hands,” he said.
President Tinubu called for stronger collaboration between the federal and state governments to address pressing challenges, including local government autonomy, agricultural productivity, and currency stability.
Expressing his commitment to local government development and autonomy, the President stressed its importance for grassroots development and dispelled rumours of disagreement with the governors.
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“We will not fight within us. I will drive the change. You control your local governments. You can restore hope by effectively fulfilling what the people expect at the grassroots level.
“There were gossips that we had disagreements on local government autonomy. No. Just drive development at the local government.
“Nobody wants to take them away from you, but we need collaboration. Let’s do it together and ensure Nigeria is better off for it,” said Tinubu.
He urged governors to prioritise agricultural growth as a pathway to economic stability.
“We have to work harder, grow more, and ensure the situation of our currency improves. Nigeria will see prosperity, but it requires consistent effort from all of us,” he said.
He also urged the governors to take pride in their efforts and acknowledged their progress across the states.
“There is no state we cannot visit and be proud of its development. We have better allocations now. Let me take the abuse; you take the privileges. Together, we will build a nation we are all proud of,” he said.
Reflecting on his leadership journey in the last 19 months, the President expressed confidence in Nigeria’s capacity to thrive given the resilience and leadership demonstrated by the administration.
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“I am glad I asked for this job, and Nigerians gave me the mandate. We’ll be on this voyage together. I thank all of you for where we are today and where we are heading,” he said.
Abdulrahman Abdulrazak, chairman of the Nigeria Governors Forum and Governor of Kwara, acknowledged the tangible progress made under President Tinubu’s leadership.
“The policies are working. In agriculture, I was in Jigawa. The complaint in Jigawa was that there was a bumper harvest, but because of the strength of our currency, traders exported the harvest.
“So, most of us are encouraging ourselves to buy bumper stocks into our silos, store them for the rainy day. So, in terms of agriculture, the policy is working.
“We’ll continue to deepen that and ensure we are 100% sustained in food security and feed the whole of West Africa,” he said.
The governor urged the President to visit various states to see the ongoing transformations and progress firsthand.
He assured the President of the support of the governors, particularly in contributing to local security architecture to further enhance the nation’s security.
“I must confess that I have not done two years in this administration, but I’ve done more projects in two years than in the four years of my first term.
“We are getting more funding due to the restructuring of the economy. Yes, there is inflation, but we are overriding it,” the governor said.
Tinubu: Governors most important link to Nigeria’s development
NAN
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No plans to address hunger, unemployment in Tinubu’s New Year message – PDP
No plans to address hunger, unemployment in Tinubu’s New Year message – PDP
The Peoples Democratic Party (PDP) says President Bola Tinubu’s New Year message “offers no hope in sight” for Nigerians.
In a statement issued on Wednesday, Debo Ologunagba, PDP spokesperson, described the president’s New Year speech as “self-satisfying”,
The opposition party’s spokesperson said Tinubu’s administration is “completely disconnected and unconcerned” with the economic hardship in the country.
“Nigerians were appalled that despite the prodding by the PDP and well-meaning citizens, President Tinubu’s New Year speech did not articulate any specific direction for the nation or proffer solutions to the myriad of problems caused by APC’s misrule,” the statement reads.
“President Tinubu’s speech again underlines APC’s insensitivity to the anguish of Nigerians by failing to present any definite policy roadmap towards reducing the price of petroleum products, addressing the widespread hunger in the land, and revamping our ailing productive sector.”
Ologunagba said Tinubu did not articulate any “solution-based direction” for the critical sectors such as electricity, oil and gas, road infrastructure, and food production, among others.
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“It was also pathetically devoid of a precise plan to address unemployment through strategic investment to stimulate multisectoral small and medium scale enterprises in the country,” Ologunagba said.
“If indeed the APC administration has the interest of Nigerians at heart, the New Year address would have made definite pronouncements on the price of fuel, especially given that with deft, transparent, and innovative management of resources, economic potentials, comparative advantage, national refining capacity, and effective policing of our borders, Nigerians should not pay more than N350 per litre for petrol within the country.
“In any case, from the speech, it is clear that the Tinubu-led APC administration lacks the expected patriotic commitment as well as the required capacity, competence, and skills to effectively harness and manage the resources of the nation for the good of the citizens.
“Moreover, President Tinubu’s claim in the speech that Nigerians placed their confidence in him as their president is ludicrous and shows that he is disconnected from the reality of his abysmal perception among Nigerians.”
The PDP spokesperson added that Nigerians have lost faith in Tinubu’s administration and have since moved on, “eagerly waiting for the next round of elections that will mark the end of the nightmare which the APC represents to our nation”.
He asked Tinubu to listen to Nigerians and be more committed and focused on the purpose of governance, which is the welfare and security of the people.
No plans to address hunger, unemployment in Tinubu’s New Year message – PDP
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Anthony Joshua presents autographed glove to Tinubu during visit
Anthony Joshua presents autographed glove to Tinubu during visit
Nigerian boxing legend and two-time world heavyweight champion Anthony Joshua recently paid a courtesy visit to President Bola Tinubu at his Lagos residence.
During the visit, Joshua presented the President with an autographed boxing glove inscribed with the message: “To the Great Asiwaju Jagaban Borgu of Africa, Bola A Tinubu.”
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The meeting, as revealed by the Special Assistant to the President on Social Media, Mr. Dada Olusegun, was captured in a post shared on social media.
He wrote, “Champ @anthonyjoshua pays Homage to President Bola Ahmed Tinubu at his residence in Lagos. Presents him with his autographed glove.”
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