The World Bank approved a $2.25 billion loan for Nigeria in a bid to bolster the country’s finances and support ongoing economic reforms.
This comes as Nigeria faces its worst cost-of-living crisis in years, fueled by President Bola Tinubu’s economic policies.
The loan consists of two parts. A larger portion, $1.5 billion, aims to alleviate the hardship faced by millions of Nigerians struggling with rising poverty.
This money will go towards social safety nets, specifically a cash transfer program that will significantly increase the number of beneficiaries.
The remaining $750 million is earmarked for tax and revenue reforms. It will also help safeguard oil revenues threatened by declining production due to theft.
President Tinubu’s reforms, which include ending fuel subsidies and streamlining exchange rates, have caused inflation to surge to a 28-year high.
The loan is intended to offer both immediate relief and long-term solutions. The cash transfer program is expected to impact up to 70 million people, while the government aims to attract foreign investment to bolster the economy.
However, Nigeria’s already high debt burden raises concerns about its ability to manage additional loans.
Despite these concerns, the World Bank believes President Tinubu’s reforms are crucial for long-term stability.
“The government’s economic policies have placed the country on a new path which can stabilize its economy and lift its people out of poverty,” stated Ousmane Diagana, World Bank vice president for Western and Central Africa.
