FG Seeks $1.5 Billion Loan Facility From World Bank

The federal government has revealed that Nigeria intends to obtain a new $1.5 billion loan facility from the World Bank as part of attempts to overcome fiscal deficits in the 2023 budget.

Wale Edun, Minister of Finance and Coordinating Minister of the Economy, disclosed this in a press conference with media at the ongoing 2023 Annual Meetings of the World Bank and the International Monetary Fund (IMF) in Marrakech, Morocco.

"On the talks with the World Bank on $1.5 billion budget support, that is correct. The World Bank is the number one multilateral development bank helping developing countries or funding developing countries, projects and programmes, and sectors," Edun told journalists.

"It has free money through International Development Association (IDA). It is for the poorer countries and right now I think we qualify as one of the countries that can borrow in the normal window of World Bank funding but also some concessionary IDA funding and that means that effectively the interest rate will be zero."

Edun noted that Nigeria has nearly risen to the top of people's lists when they are considering where to invest, confirming his emergence as the chair of the Africa Group I constituency and leader of all the African countries in the IMF executives.

In addition to promising that President Bola Tinubu's administration would not exceed Ways and Means constraints, he also committed that monetary and fiscal policies would be coordinated, "regarding Ways and Means, President Bola Ahmed Tinubu, even while campaigning as a candidate, President-elect and President, has a commitment not to go beyond the statutory limits One of his priorities is the rule of law - sticking to agreements, sticking to the law. And so, his commitment is to come within the limit for Ways and Means, which essentially means overdraft borrowing from the Central Bank. However, having made that commitment and given that direction of travel, I think the idea and commitment is to come within whatever is the statutory limit as soon as possible."

Shedding more light on the proposed budget financing, the finance minister said in this particular case, it has long been in the pipeline, and he is hoping that funding will come through soon.

"There is a Federal Executive Council meeting on Monday (tomorrow) that should be able to discuss this, as well as other initiatives for financing on reasonable terms. We have talked about the high costs of money- the World Bank money is the cheapest," Edun added. The minister pointed out that the country has taken bold and courageous steps to attract investments.

Regarding the opportunity to attract investments, there have been many conversations and, in all honesty, the narrative is that with the bold courageous steps that Nigeria has taken, we are now at the forefront, almost number one on people's list when they want to look at where to invest; that is now the narrative.

Nigeria is definitely on the right path; "we have taken the right decision for the economy to recover and for it to attract Foreign Direct Investment (FDI) and as well, I will add, domestic investment to recover full economic growth, job creation and at the same time, achieve inclusivity of women and young people," he added. He assured that the federal government was taking steps towards cutting down its expenditure.

"We've talked about tax reform, and that tax reform will include looking at expenditures on taxes, waivers, duties, and tax exemptions. So, that is very much part of the plan," he added.