The World Bank has finally broken the silence on the news report that President Muhammadu Buhari-led government is borrowing a whopping sum of $800 million from the multilateral institution.
The Director of the World Bank in Nigeria, Shubham Chaudhuri who spoke on Monday in an interview with This Day said it is not a fresh one.
According to reports the World Bank Official disclosed that the $800 million facility was actually approved by the board of directors of the World Bank in December 2021.
The Director also stated that the decision to withdraw the loan facility would rest with the incoming Bola Tinubu government, adding that the National Assembly has the power to approve the loan request or not.
He further explains that securing the National Assembly’s approval would make it easy for the incoming government to easily deploy palliatives if it decides to phase out the country’s controversial fuel subsidy policy.
Chaudhuri, however, reiterated the need to eliminate the payment for fuel subsidies to create fiscal space for other activities that would directly impact the welfare of the citizens.
He said: “If the incoming government commits to removing fuel subsidy, the whole point of having the National Assembly approval is that it can immediately start providing relief to ordinary Nigerians. That is actually the smart thing to do.
“The outgoing government is saying look, ’we have this facility waiting, you (incoming government) don’t have to go through the process of getting National Assembly approval.’ If this had not gone to the National Assembly, the new government would have to wait for approval from our board which takes at least six months.
So, the decision to draw down the facility rests with the incoming government. If it decides not to, it can be cancelled. Also, the National Assembly approving it does not mean the incoming government must draw it down.
“The only time this will translate to actual debt for Nigeria is only when it is drawn down and that decision rests with the incoming government.”
Chaudhuri said the loan facility is an additional round of financing for the National Social Safety Net Programme which had already been in operation for seven years and which started with an original $500 million.
