The World Bank on Thursday, has approved a total of $2.1 billion in a reduced rate loans to fund projects in Nigeria. It is aimed at improving access to electricity and promoting governance in the country.
The projects which were approved by the International Development Association (IDA), the bank’s low-interest arm, are expected to support Nigeria’s economic growth plan.
Nigeria growth rates recovered in the third quarter of 2016, its first in 25 years. Due to higher oil prices, growth returned largely with the country relying on crude sales for much of its revenue.
However, in the first quarter of 2018 growth became sluggish as the country’s non-oil sector struggled.
According to World Bank “ more than half of the loans would be used to fund power and climate change projects and boost fiscal transparency”. It also approved a $7 million grant for nutrition.
Nigeria privatised most of its power sector in 2013 but retained control of its dilapidated monopoly transmission grid, often blamed for hobbling growth.
The country intends to raise $2.8 billion of debt offshore to help part-finance its 2018 budget and plans to explore all options to lower costs, the debt office head told Reuters.
The debt office said it could tap capital markets or concessionary loans from the World Bank after the 2018 budget had been approved.