President Bola Tinubu’s efforts to stabilize Nigeria’s economy and enhance support for its most vulnerable citizens have received a substantial boost with a $2.25 billion support package from the World Bank.
The announcement came from Mr. Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, who detailed two significant financial support programs in a recent statement.
The package includes $1.5 billion allocated to the Nigeria Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing Programme and $750 million for the Nigeria Accelerating Resource Mobilisation Reforms (ARMOR) Programme-for-Results.
“This combined total of $2.25 billion will offer essential financial and technical support as the government continues to address economic distortions,” Edun stated. “These reforms will create quality jobs and economic opportunities for all Nigerians. We welcome the support of the RESET and ARMOR programmes as we further consolidate and implement our policy reforms, consistent with accelerating investment and using public resources more sustainably to achieve our development goals.”
Since taking office, the Tinubu Administration has faced significant economic challenges and recognized the urgency of reforms to rejuvenate the economy. Early measures included unifying the multiple exchange rates and halting opaque petrol subsidy payments to improve fiscal transparency and stability.
The Central Bank of Nigeria (CBN) has also refocused on price stability, tightening monetary policy by increasing interest rates to combat inflation. Additionally, a targeted cash transfer program is being implemented to alleviate the impact of high inflation on poor and economically insecure households.
Ousmane Diagana, the World Bank Vice President for Western and Central Africa, praised Nigeria’s reform efforts: “Nigeria’s comprehensive macro-fiscal reforms are placing the country on a new path that can stabilize the economy and lift people out of poverty. It is essential to maintain the momentum of these reforms and continue to provide support to the poor and vulnerable to mitigate the impact of the cost-of-living crisis.”
The RESET DPF aims to strengthen Nigeria’s economic policy framework, create fiscal space, and protect the poor and vulnerable. Meanwhile, the ARMOR P-for-R focuses on tax and excise reforms, improving tax revenue and customs administration, and safeguarding oil revenues.
The funding, provided by the International Development Association (IDA), comes with highly concessional terms, including a 40-year term and an interest rate of just over one percent. IDA resources are designed to boost economic growth, reduce poverty, and improve lives in the world’s poorest countries, with 39 of the 76 eligible countries located in Africa.
The approval of these financial packages represents a significant milestone in Nigeria’s efforts to stabilize its economy and create a sustainable path for growth and poverty reduction. In April, Edun announced Nigeria’s request for the $2.25 billion facility from the World Bank. By early June, the minister indicated that the loan would be finalized soon, promising that the government’s reforms would soon return the economy to a path of sustainable growth and significantly reduce inflation.
Edun highlighted the reforms’ achievements, including the gradual restoration of investor confidence and the repayment of a N7.3 trillion overdraft from the CBN under the “Ways and Means” policy. He noted that while initial measures led to an inflationary spike due to increased fuel costs and exchange rate adjustments, the CBN’s anti-inflation measures are starting to show positive results. Despite high inflation rates, the economy is growing, supported by both public and private sector investments in infrastructure.
“The economy is growing. People are finding sources of funding and equity, including government contributions to public-private sector funding for infrastructure, which is helping to create jobs and grow the economy,” Edun said. However, he acknowledged that inflation remains high at 33.69 percent overall and 40.5 percent for food, but noted that monthly inflation rates are gradually declining.
This financial backing from the World Bank signifies strong international support for Nigeria’s economic reforms, providing a critical lifeline as the country navigates its way toward sustainable growth and poverty reduction.