The World Bank, yesterday, enhanced Nigeria’s foreign exchange liquidity position with the approval of the Covid-19 Budget Support credit promised during the Spring Meetings in America earlier in the year.
The credit approval is believed would help address the current forex squeeze and shore up the local currency value, which has for sometime been under serious pressure due to poor foreign exchange earnings by Nigeria arising from failing crude oil receipts.
The $1.5 billion loan approval was announced in a statement by World Bank on Tuesday is a five-year Country Partnership Framework (CPF) that will last from 2021 to 2024.
“This Country Partnership Framework will guide our engagement for the next fivw years in supporting the Government of Nigeria’s strategic priorities by taking a phased and adaptive approach,” World Bank Country Director for Nigeria, Shubham Chaudhuri said.
World Bank Board of Directors approved the $1.5 billion for two projects, which include: Nigeria Covid-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES) and the State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS).
The Bank noted that the CPF will focus on four areas of engagement which include, investing in human capital by increasing access to basic education, quality water, and sanitation services; improving primary healthcare; and increasing the coverage and effectiveness of social assistance programs.
Others include, promoting jobs and economic transformation and diversification by supporting measures to unlock private investment and job creation and increasing access to reliable and sustainable power for households and firms.
It is also expected that the CPF will also focus on boosting digital infrastructure, and developing economic corridors and smart cities, to provide Nigerians with improved livelihoods.
The World Bank in the statement added that Nigeria is at a critical juncture, hence the approval of the loan.
“With the sharp fall in oil prices as a result of COVID-19, the economy is projected to contract by over 4% in 2020, plunging the country into its deepest recession since the 1980s. Government revenues could fall by more than 15 billion dollars this year, and the crisis will push an additional 5million Nigerians into poverty in 2020,” the statement read in part.
The World Bank noted that the facility was prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).