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Here’s what World Bank’s approval of $1.5bn loan support for states means for economy

Here’s what World Bank’s approval of $1.5bn loan support for states means for economy

Following a five-year country partnership framework (CPF) that will last from 2021 to 2024, the World Bank on Tuesday said it has approved Nigeria’s $1.5 billion loan request.

Prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the Washington-based institution said the approved loan is to support Nigeria with social protection and to strengthened state-level COVID-19 response.

According to market analysts, the $1.5 billion loan to Nigeria will serve as a relief to the country’s shrinking reserve which has dropped to a three-year low. It would also help states better deal with the economic fall-out of the pandemic.

“This country partnership framework will guide our engagement for the next five years in supporting the government of Nigeria’s strategic priorities by taking a phased and adaptive approach,” Shubham Chaudhuri, World Bank country director for Nigeria said.

Read Also: World Bank approves $1.5bn state support loans for Nigeria

For Nigeria to realize its long-term potential, Chauhuri said the country with the highest population in Africa would have to make tangible progress on key challenges and pursue some bold reforms.

”Our engagement will focus on supporting Nigeria’s efforts to reduce poverty and promote sustained private sector-led growth, ” he said.

The loan will focus on four areas of engagement namely Investing in human capital, promoting jobs and economic transformation and diversification, enhancing resilience and strengthening the foundations of the public sector.

The bank’s board of directors also approved $1.5 billion for two projects in Nigeria.