Fuel Subsidy Removal, Tax Reforms Earn Nigeria $1.5 Billion World Bank Loan
The World Bank has approved a $1.5 billion loan to Nigeria, recognizing the country’s progress in implementing key economic reforms, including fuel subsidy removal and tax policy adjustments. This funding is part of a broader $2.25 billion package aimed at stabilizing Nigeria’s economy, improving public service delivery, and supporting vulnerable populations.
The loan, disbursed in two tranches, underscores the World Bank’s commitment to Nigeria’s ambitious efforts to diversify revenue sources, safeguard oil income, and promote fiscal sustainability. The first tranche of $750 million, with a 12-year maturity and six-year grace period, was released in July 2024. The second tranche, tied to fulfilling specific economic reforms, followed in November 2024 with a 24-year repayment period and an 11-year grace period.
Central to this initiative are two programs: the Reforms for Economic Stabilization to Enable Transformation (RESET) and the Accelerating Resource Mobilization Reforms (ARMOR). These programs aim to enhance The Country’s fiscal framework, unify exchange rates, phase out costly fuel subsidies, and strengthen tax administration and customs revenue collection.
Also Read: World Bank Approves $1.57bn Loan to Bolster Nigeria’s Health, Education, and Climate Resilience
Acknowledging Nigeria’s strides, World Bank Vice President for Western and Central Africa, Ousmane Diagana, stated, “Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path to stabilize its economy and lift its people out of poverty. Sustaining this reform momentum is critical.”
Finance Minister Wale Edun echoed this sentiment, emphasizing the government’s commitment to restoring macroeconomic stability and fostering sustainable growth. “The RESET and ARMOR programs are pivotal in accelerating investment and ensuring public resources align with development priorities,” he said.
