World Bank Approves $2.25 Billion Support Package for Tinubu’s Reforms

In a significant boost to President Bola Ahmed Tinubu’s efforts to stabilize the economy and support vulnerable citizens, the World Bank has approved a $2.25 billion financial package.

This package comprises two major programs: the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme (DPF) worth $1.5 billion and the Nigeria Accelerating Resource Mobilisation Reforms (ARMOR) Programme-for-Results (P-for-R) worth $750 million.

According to Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, this support will provide essential financial and technical assistance to the government as it continues to address economic distortions and create quality jobs and economic opportunities for all Nigerians.

The reforms aim to use public resources more sustainably to achieve development goals.

The Tinubu administration inherited significant economic challenges last year but has taken bold steps to reboot the economy and strengthen Nigeria’s financial outlook.

Key measures include unifying multiple exchange rates, stopping opaque subsidy payments on petrol, and refocusing the Central Bank of Nigeria (CBN) on price stability through monetary policy tightening.

A targeted cash transfer program is also being implemented to cushion the impact of high inflation on poor and economically insecure households.

The World Bank’s Vice President for Western and Central Africa, Ousmane Diagana, commended Nigeria’s comprehensive macro-fiscal reforms, stating that they place the country on a new path that can stabilize the economy and lift people out of poverty.

He emphasized the importance of maintaining reform momentum and continuing support for the poor and vulnerable to mitigate the impact of the cost-of-living crisis.

The RESET DPF aims to strengthen the economic policy framework, create fiscal space, and protect the poor and vulnerable.

The ARMOR P-for-R supports tax and excise reforms, improves tax revenue and customs administration, and safeguards oil revenues.

This financing package demonstrates the World Bank’s strong partnership with Nigeria and supports efforts to rejuvenate the economy and expedite poverty reduction, serving as an example for Africa.

The International Development Association (IDA), the World Bank’s fund for the poorest countries, provides highly concessional funding with a 40-year term and an interest rate of just over one per cent.

The approval of these financial packages marks a significant step in Nigeria’s efforts to stabilize its economy and create a sustainable path for growth and poverty reduction.

The government’s reforms have already shown positive results, including the gradual return of domestic and foreign investors’ confidence, payment of N7.3 trillion overdraft from the Central Bank of Nigeria (CBN), and declining inflation and naira stability.

Minister Edun expressed optimism that the reforms will return the economy to the path of sustainable growth and drive down inflation drastically.

He acknowledged that initial measures taken to stabilize the economy have led to an inflationary spike but emphasized that inflation is coming down month by month, and the economy is growing with job creation and infrastructure development.

This development signals a new chapter in Nigeria’s economic journey, and the World Bank’s support package will play a crucial role in achieving the country’s development goals.

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