Nigeria has fulfilled all conditions for $1.5bn World Bank loan —Minister of Finance

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The minister of finance, budget and national planning, Zainab Ahmed  has said the federal government has fulfilled the conditions required for the World Bank loan.

Ahmed told Bloomberg in an interview on Friday that Nigeria is in the final stages of losing the loan.

At the onset of the COVID-19 pandemic, the federal government requested for loans totalling $6.9 billion from the World Bank, International Monetary Fund and African Development Bank. Nigeria received a $3.4 billion facility from the IMF in April.

However, the $1.5 billion World Bank loan was delayed with reports that the Bretton Wood institution is not convinced about Nigeria’s fiscal and monetary reforms.

Nigeria has removed subsidy paid on petrol and devalued the naira. According to Ahmed, the World Bank will discuss the loan package at their next meeting and possibly approve the request.

The minister also explained that Nigeria is also considering joining the G-20 debt relief initiative and is already talking to commercial lenders to secure their backing.

“We will consider joining as long as it is safe for us to do so,” Ahmed said.

Bloomberg reports that Nigeria could not participate initially because some of the conditions were unfavourable for existing loan commitments with bilateral lenders and other international borrowings.

Speaking on the widening gap between the official and parallel market exchange rates, she said: “We are very concerned, both the fiscal authorities and the monetary authorities. We’ve been trying to close the gap and the progress has not been as much as we hoped. The reason we have a gap is because of the decline in revenue from the oil and gas industry.

“We have been taking measures to close the gap. We hope to get to an even level very soon so the impact of the exchange rate will become moderated.”

Ahmed said Nigeria may raise funds from the Eurobond market in 2021, depending on the interest rate.