World Bank delays approval of loan to Nigeria

Naira reform is the main concern being expressed by the World Bank as the reason for delaying the approval of Nigeria’s request for a $1.5 billion loan.

In the past, both the World Bank and International Monetary Fund, IMF, advised Nigeria to float its currency and allow market forces to determine the value of the naira.

According to the report, the World Bank had aimed to bring the loan request to its board for approval this August but the approval will now be delayed till October.

“They are not convinced about the reforms,” a source close to the government said.

The Naira has been devalued by the CBN twice in 2020 and the Federal Executive Council in July, approved the removal of petrol subsidy.

The finance ministry was reported to have directed queries to the World Bank and while the Bretton Wood institution said discussions had reached an advanced stage, it confirmed that the loan request had not been presented to its board.

“Of particular importance are the steps the government is taking to marshal the needed fiscal resources for a pro-poor response to the crisis and undertake the reforms that will help ensure a robust recovery,” a statement by the World Bank read.

The World Bank has already projected that Nigeria is heading for its worst recession in 40 years, which the Finance Minister, Mrs Zainab Ahmed, reiterated last week.