The Federal Government on Monday said it had secured a budget support loan worth $1.5bn from the World Bank and another worth $80m from the African Development Bank to finance various projects in critical sectors of the economy.
It said Nigeria qualified for the “relatively cheap” loans given its “macro-economic moves” in the past couple of months since President Bola Tinubu assumed office.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told State House Correspondents that the FG would receive $1.5bn as a whole before the end of the year, provided it fulfilled its end of the deal.
He explained, “Council approved today the application for financing from the World Bank. And in particular, the International Development Association, which is the virtually free or zero-interest lending arm or financing arm of the World Bank.
“The total is $1.5bn. The world today is one of the high-interest rates as the developed world looks to fight inflation. They do it by restricting money, and keeping interest rates high so that you can get inflation down.
“That means that interest rates for everybody else become not just high but very painful, if not unaffordable within that context.”
Edun clarified that Nigeria took macroeconomic moves and tough decisions to restore balance in its economy, warranting support from multilateral development banks.
“The bold, brave, courageous and decisive measures that Mr President has taken are being rewarded by processing for Nigeria $1.5bn of immediate financing, which, provided that we do everything on our side, will be in before the end of the year.
“It is based on that the World Bank is willing to consider and to process on our behalf $1.5bn of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.
And it comes in one go. It doesn’t drip as will be done for a project and is just to support the reform effort. And that was what was presented to the Federal Executive Council, and the members approved that we go ahead with that financing given that it is affordable,” said Edun.
The former Lagos Finance Commissioner said lags would exist between the cause and effect of the recent reform.
Although some effects are in place, such as the relative reduction in smuggling and rising domestic production in some areas, ‘it takes time before the full benefits are in,” he noted.
The Finance Minister also revealed that the Council approved $80m financing from the African Development Bank.
He explained, “This financing is for a project in Ekiti called the Ekiti Knowledge Zone Project. EKZ is basically to support young people and their quest to take on technology to use it to be employed, trained and benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.
“The bold, brave, courageous and decisive measures that Mr President has taken are being rewarded by processing for Nigeria $1.5 billion of immediate financing, provided that we do everything on our side before the end of the year.
“So, it’s $80 million to help the young people in the sector of the knowledge economy, technology and communications generally.”
Meanwhile, the Council approved the creation of the Presidential Council on Industrial Revitalisation Roadmap, with President Bola Tinubu as its chairperson.
The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, said the 10 subcommittees in the Council would consider all the policies within various ministries, as well as the Ministry of Industry, Trade and Investment.
She explained, “We have a lot of policies, frameworks and guidelines that should help to revitalise the industries within these different ministries and agencies.
“And we are supposed to collaborate and come up with a single roadmap for each of these subcommittees or each of these roadmaps. And that is geared towards developing the full industrial revival of the economy in line with the eight-point agenda of Mr. President.
“At the end of this, we expect to see a boost in investment in the different industrial sectors. We expect to see a boost in job creation and employment and a general increase in our indices, especially our GDP growth rates, which were said to be growing from 3.5 per cent hopefully to seven per cent. And the GDP base of about 1 trillion, which is in line with Mr President’s vision.”
The council members will be split into 10 subcommittees on consumer credit, commodity exchange, heavy industries and steel development, trade facilitation and ease of doing business.
Others are subcommittees on licensing and certification of artisans, trade facilitation and realisation, mining and solid minerals, oil and gas and creative industries.
Uzoka-Anite said the subcommittees on defence, industries and pharmaceutical were stepped down.
The FEC also approved the creation of a committee to review the Free Trade Zone setup.
This committee will ‘look at the setup, look at incentives, look at the laws and the reforms and come up with reforms that will help to stimulate and catalyse the economic benefits of the free trade zones and special economic zones,” the Minister explained.