By Obinna Chima
The World Bank Group has approved a $1.5 billion package to help build a resilient recovery post-COVID-19 for state-level intervention in Nigeria.
In addition, the multilateral institution discussed a new five-year Country Partnership Framework (CPF) from 2021 to 2024 for Nigeria.
The $1.5 billion was part of a $3 billion loan request the federal government had been pushing for.
A statement from the bank reiterated that Nigeria was at a critical juncture, adding that with the sharp fall in oil prices as a result of COVID-19, the economy was projected to contract by over four per cent in 2020. This, it anticipated would plunge the country into its deepest recession since the 1980s.
Government revenues could fall by more than $15 billion this year, and the crisis could push an additional five million Nigerians into poverty in 2020, it projected.
It explained that the $1.5 billion was for two projects, which included Nigeria’s Covid-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES).
“This program will help increase access to social transfers and basic services, as well as provide grants to poor and vulnerable households. It will also strengthen food supply chains for poor households while facilitating recovery and enhancing capabilities of MSMEs. This is financed through an International Development Association (IDA) credit of $750 million,” it explained.
The other project was for the State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS) Additional Financing.
“Building on the progress made across 36 States, the original SFTAS program will be expanded and scaled up in response to COVID-19. The Additional Financing will help meet the financing gap in the Program Expenditure Framework, due to the sharp reduction in government revenues associated with the crisis.
“ It will help increase the efficiency in spending, strengthen revenue mobilization, and enhance accountability and transparency in public resource management to further strengthen state-level COVID-19 response. The project is financed through an International Development Association (IDA) credit of $750 million,” it added.
The World Bank Country Director for Nigeria, Shubham Chaudhuri, explained that the CPF would guide the bank’s engagement with Nigeria for the next five years in supporting the government’s strategic priorities by taking a phased and adaptive approach.
“To realise its long-term potential, the country has to make tangible progress on key challenges and pursue some bold reforms. Our engagement will focus on supporting Nigeria’s efforts to reduce poverty and promote sustained private sector-led growth,” he added.
Prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the 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.