The World Bank has officially stated that it authorized a loan of $800 million to the Nigerian government in December 2021.
President Muhammadu Buhari’s administration was considering eliminating fuel subsidies when the loan was approved.
At a recent meeting held by the World Bank to assess the country’s economic performance over the previous six months, Shubham Chaudhuri, the country director for Nigeria, provided this information.
Contrary to prior rumors that suggested it was a grant, Chaudhuri emphasized that the money supplied by the World Bank is in the form of a loan. He continued by saying that the loan is meant to lessen the challenges experienced by the poor and vulnerable population as a result of the removal of the fuel subsidy.
The disbursement of the loan had experienced delays due to President Muhammadu Buhari’s hesitation in removing the fuel subsidy until the final days of his presidency. Shortly before his handover, Buhari sent a letter to the Senate seeking approval to secure an $800 million loan from the World Bank to mitigate the effects of subsidy removal.
Zainab Ahmed, the former Minister of Finance, Budget, and National Planning, had previously stated that the loan’s release was contingent upon the planned removal of subsidies in June 2023.
Following his inauguration on May 29, President Bola Tinubu ultimately announced the removal of petrol subsidies. In response, the Nigerian National Petroleum Corporation (NNPC) Limited, within 48 hours of Tinubu’s declaration, announced a price adjustment for petrol.
The World Bank Country Director, Dr. Chaudhuri, expressed support for the Federal Government’s decision to remove subsidies and unify the exchange rate. Despite acknowledging I the painful nature of the policy, he believes it is a crucial step towards rebuilding the nation’s economy.