Forex crisis: Nigeria’s ID4D project gains N8.6bn from Naira devaluation
The devaluation of the Naira resulted in a forex gain of N8.6 billion for the Nigeria Identification for Development (ID4D) project, through which international financiers led by the World Bank are pushing for the enrollment of all Nigerians for the National Identification Number (NIN).
The World Bank disclosed this in the project’s 2023 audited financial statement just released.
The $430 million project started in 2020 is being funded jointly by the International Development Association (IDA), the French Development Agency (AFD), and the European Investment Bank (EIB).
According to the report, funds received from the financiers in US$ or in Euro (€) are translated into the Nigerian Naira (NGN) On withdrawal at the exchange rate ruling on the date of withdrawal based on the CBN Autonomous Foreign Exchange Market (AFEM).
The report shows that the project’s USD and EURO-denominated accounts being managed by the National Identity Management Commission (NIMC) and the Central Bank of Nigeria (CBN) received a total of $2,538.92 and €3.03 million in the year under review.
The report indicated that one dollar which was exchanged for N448.05 at the beginning of the year, closed the year at N898.8, while one EURO that was exchanged for N478.3 in January 2023, closed the year at N993.9. The decline in the value of the Naira led to a forex gain of N8.6 billion.
“During the period, the Project’s transactions were carried out in local currency (NGN). Foreign Exchange gain of N8,607,679,554.68 is recognised,” the report stated.
With Naira now exchanging for about N1,600/$1 and N1,750/€, NIMC will now have more money to fund several outstanding aspects of the project, which include procurement of power backup systems; improvement of telecommunication links between NIMC’s critical backend sites; procurement of a Computer Emergency Response Team (CERT) and Security Operations Centre (SOC); upgrading of the data recovery centre (DRC); and procurement of a contact centre and Customer Relationship Management (CRM) solutions.
According to the World Bank, the project disbursement rate stood at 37.37 percent as of June 2024. This means that only about $160.7 million has been released out of the $430 million budgeted,
To ensure full disbursement and realise the objectives of the project, the Bank last month announced the restructuring and extension of the project, which was originally designed to close on June 30, 2024.
The World Bank in the project restructuring document released in July noted that Nigeria has yet to meet one of the conditions for the disbursement of more funds for the implementation of the project.
“One final disbursement condition which has yet to be met is the amendment of the NIMC Act to promote an inclusive and non-discriminatory legal and regulatory framework,” it said.
However, the NIMC in a statement issued last week disclosed that the Nigerian National Assembly has begun the process of repealing and enacting the NIMC Act No. 23. It added that the NIMC Amendment Bill represents a significant legislative endeavour to enhance the efficacy and inclusivity of the Identity Management System.
“The amendments seek to fortify the foundational framework of the NIMC and its operations by; Expanding the Scope of Registrable Persons.
“The benefit to the country is a more comprehensive and inclusive identification system, which enhances national security, facilitates efficient service delivery and promotes financial inclusion,” NIMC said in a statement signed by its Head of Corporate Communications, Kayode Adegoke.
