World Bank approves $2.25B loan to support economic reform in Nigeria
TLDR
- World Bank approves $2.25 billion loan for Nigeria to boost revenue and aid economic reforms amid cost-of-living crisis
- $1.5 billion portion of the loan focuses on alleviating poverty, linked to President Bola Tinubu's economic overhaul last year
- $750 million allocated for tax reforms, revenue support, and preservation of oil revenues amidst production challenges.
The World Bank has approved a $2.25 billion loan for Nigeria to shore up revenue and support economic reforms that have contributed to the worst cost-of-living crisis in many years for Africa's most populous country.
The bank said in a statement late Thursday that the bulk of the loan — $1.5 billion — will help protect millions who have faced growing poverty since a year ago when President Bola Tinubu came to power and took drastic steps to fix the country's ailing economy.
The remaining $750 million, the bank said, will support tax reforms and revenue and safeguard oil revenues threatened with limited production caused by chronic theft.
Key Takeaways
President Tinubu's economic reforms — including ending decadeslong but costly fuel subsidies and unifying the multiple exchange rates — have resulted in surging inflation that is at a 28-year high. Under growing pressure from citizens and workers protesting the hardship, Tinubu's government said in May that it was seeking the loan to support its long-term economic plans. The government said it was also taking steps to boost foreign investment inflows, which fell by 26.7% — from $5.3 billion in 2022 to $3.9 billion in 2023. Nigeria already has a high debt burden that has limited how much money the government can spend from its earnings. Its reliance on borrowing for public infrastructure and social welfare programs saw public debt surge by nearly 1,000% in the past decade.
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