Nigeria’s finance minister, Wale Edun, has hinted that Nigeria is in talks with the World Bank to finalize a $1.5 billion loan for the country. The minister expects the loan to come in soon.
- According to reports, Edun confirmed this at the recently concluded annual World Bank and the International Monetary Fund (IMF) meeting in Marrakech, Morocco.
- He added that the loan is accessible to Nigeria under the World Bank’s International Development Association (IDA) funding.
Be smart: The World Bank’s IDA provides interest-free loans and grants to the world’s poorest countries. These loans have zero or low-interest charges and are repaid over a 25-to-40-year period.
- Edun said Nigeria qualified for the “free money” made available by the IDA for the poorer countries and added that there was no stigma attached to securing the funding.
- It is unclear when exactly the funds will be disbursed to the country.
- Edun said:
“Talks with the World Bank on a $1.5 billion budget support is correct. The World Bank … has free money through the IDA. It has this for the poorer countries, and right now, I think we qualify …”
- He added that Nigeria’s executive council will discuss the loan.
“There’s a Federal Executive Council meeting on Monday that should be able to discuss this and other initiatives for the financing of reasonable terms.”
- Nigeria’s economy has shrunk recently following drastic economic reforms.
- The country’s external debt was valued at $43.2 billion in the second quarter of 2023, and more loans could see the country’s debt profile become larger.
- The IMF projects that Nigeria is set to be overtaken by South Africa as Africa’s largest economy due to a reduction of Nigeria’s gross domestic product (GDP) to $395 billion.
- The reduction has been attributed to the harsh economic reforms implemented by Nigeria’s government in recent months.
- However, the World Bank has praised these measures and described them as needed in the short term to ensure long-term growth.