In response to escalating inflation and economic difficulties, the Nigerian government has requested an 18-month extension for the World Bank’s $800 million palliative loan, aimed at enhancing the country’s social safety net programs.
The extension, if approved, would move the project’s closing date from June 30, 2024, to December 31, 2025.
The government stated that since its inception, the loan has benefitted approximately three million poor and vulnerable households.
It said beneficiaries include 700,000 households from rural areas and 2.5 million from urban areas, covering 1,652 urban wards.
Nigeria is battling high inflation, which peaked at 33.2% in early 2024, driven by subsidy removals and exchange rate depreciation.
The project aims to realign timelines and enhance the National Social Safety Net Program-Scale Up.
The government seeks approval to restructure the project’s national steering committee, moving the chairmanship from the Minister of Humanitarian Affairs and Poverty Alleviation to the Minister of Finance, amidst a probe into alleged mismanagement of the scheme.
As of now, 39.38% of the loan has been released, with a pending balance of approximately $485 million.
The loan includes various charges: a maximum commitment charge rate of 0.5% per annum on the Unwithdrawn Financing Balance, a service charge of 0.75% per annum on the withdrawn credit balance, and an interest charge of 1.25% per annum on the withdrawn credit balance.
Payment terms include initial and increasing percentages of the principal amount over time.
The planned extension aims to distribute N75,000 in temporary cash transfers to each of the 15 million targeted households, spread over three months.
Newsng gathered that a digital payment delivery mechanism is in place to facilitate direct transfers to beneficiaries’ accounts or wallets.
Similarly, integration of the National Social Register with the National Identification Number is underway to strengthen the targeting system.
On its part, the World Bank has initiated the preparation of a Security Risk Assessment and Management Plan due to recorded security incidents involving project staff.
Additionally, measures are being taken to improve contract management and procurement practices, with ongoing support from the World Bank to enhance financial management.
Recall that the World Bank and the Federal Government of Nigeria recently unveiled ambitious plans under its Sustainable Power and Irrigation Project for Nigeria (SPIN), aiming to achieve a target of 10,000 megawatts (MW).
The announcement was made by Minister of Power, Chief Adebayo Adelabu, during the African High-Level Roundtable on Sustainable Hydropower in the African Renewable Energy Mix of the 21st Century held in Abuja.
The minister stated that SPIN seeks to unlock an additional 10GW combined capacity from various sources, including existing dams with provisions for hydropower, partially incomplete dams, greenfield projects, and multipurpose dams that can be modified or retrofitted.
