Nigeria working towards meeting World Bank’s FX unification requirement –  finance minister

Nigeria’s Finance Minister Zainab Ahmed said on Tuesday that the country was working towards meeting the single exchange rate window requirement for accessing an agreed $1.5 billion loan support from the World Bank.

READ ALSO:  Nigeria in panic mode as World Bank insists on FX rates unification before disbursing agreed $1.5bn

Ahmed made the announcement during a webinar organised by the Federal Ministry of Finance, Budget and National Planning, OSSAP-SDGs and UNDP Nigeria with the title ‘Integrated National Financing Framework for Sustainable Development’.

“The minister of finance and the Nigeria central bank are working closely together to meet that requirement,” Ahmed said.

BusinessDay gathers that Nigeria’s senior government officials were involved in consultations on Monday to come up with a plan to access the much-needed fund from the Washington-based lender.

“We are agreeing on the process and the timeline for the particular requirement,” she said.
The desperation is coming after it became clear that the Washington-based bank will not disburse any portion of the fund unless Nigeria’s multiple exchange rates were unified and the foreign exchange market freed from the shackles of the central bank.

READ ALSO:Naira falls as FX turnover declines by 62.87%

The consultations involved the finance ministry, the apex bank and the chief of staff to the president, Ibrahim Gambari, who is using his enormous diplomatic experience to try to stabilize the government whose various units are working at cross purpose.

Ahmed desperately wants to see the urgent disbursement of the World Bank fund because it is a key element of her fiscal war chest to shore up federal government finances in the face the massive collapse in revenues caused by the oil price crash and the coronavirus pandemic that is rampaging across the globe.

Curiously, the CBN also stands to benefit from an early disbursement of the World Bank loan as it could help bolster Nigeria’s foreign reserves which have come under severe pressure by a dollar demand backlog estimated by some to be in excess of $5 billion. If the demand backlog is allowed to go through, that will bring Nigeria’s external reserves below psychological threshold of $30 billion.

Meanwhile, she also noted that the Nigerian government has introduced the integrated financing framework to fund the financial gap in meeting the Sustainable Development Goals (SDGs) by 2030.

Stakeholders at a webinar on Tuesday stressed on the need for rapid mobilisation of local resources through the public, development partners, and private funds.

Edward Kallon, United Nations’ country representative, notes that the agenda of achieving the SDGs by 2030 is broad, complex, and spread beyond the capacity of the government, hence the need to mobilise both public and private funds to ensure actualisation of the goals by 2030.

READ ALSO:Backward integration: One big step to beating FX crunch

He says mobilising capital for SDGs in Nigeria has been constrained by inequality, weak financial system, uncertainty of policy, impact of conflict, climate change, as well as the Covid-19 pandemic.

He stresses on the need for development of financing modalities through increased domestic revenues, deepening efforts to attract both domestic and international investment through FDI.

He says, “The INFF process will help in understanding the financial gaps that exist in meeting these gaols, the role of the government to achieve the objectives and ways to mobilise available resources to achieve the goals.

“The estimated funding gap is $350 billion, while the private sector gap is $100 billion over the next 10 years, while the global financing gap is $2.5 trillion and private sector at $300 trillion.

“The finance required is available and can be mobilised if only if proper policies are put in place to attract them.”

Adejoke Adefulire, senior special assistant to the President on SDGs, notes that INFF is aimed and designed to ensure effective implementation of Nigeria financial framework to achieve the SDGs by 2030, and achieving these goals requires mobilising the public and private resources, this is a call for integrated approach to finance the SDGs.

“We have been working with national and international bodies to get framework that will guarantee effective implementation, and we have domesticated the Nigeria integrated sustainable development goals,” she states.

Representative of European Union in Nigeria, Kurt Corenelis, in his remark states that it is almost impossible for Nigeria to achieve the SDGs without a mobilised financing structure as the country is still battling with insufficient domestic resources.

He said, “To achieve the SDGs in Nigeria there need to be a develop finance assessment, decision makers should be brought on board to aid effective decision making and implementation, develop patterns to team up on deepening the work of SDGs.

Clement Agba, minister of state, budget and national planning, notes that the government is working to develop a roadmap to ensure progress in achieving the SDGs to provide opportunities to strengthen the link between planning and financing of the SDGs in Nigeria.

Shubhan Chaudhan of the World Bank notes that the SDGs is beyond what the government alone can provide hence the need to mobilise resources from private and developmental partners.

Ben Akabueze, director-general, Budget Office of the Federation, says the 2020 budget carries the 2030 target even though it would be a daunting task considering fiscal constraint on the part of government. Noting that government is just a fraction of the economy, he calls for a robust strategy that would make private capital feel confident around Nigeria’s SDGs.