The board of the World Bank will vote to decide on a $2.26 billion loan package to Nigeria in two weeks, providing a significant boon to the West African nation desperately trying to improve a foreign exchange liquidity problem. If the vote goes Nigeria’s way, half of the loan amount will be disbursed immediately.
“It’s basically a grant,” said Wale Edun, Nigeria’s Minister of Finance and coordinating minister for the economy in a conversation with Channels TV to discuss the state of the Nigerian economy. President Tinubu’s administration began with an immediate decision to remove fuel subsidy and relax strict FX controls.
The result of those reforms have been volatility in the FX market and record food and headline inflation. Despite raising interest rates twice, inflation continues to accelerate while plans to raise government revenues make slow progress.
“We just need to stay the course,” said Mr. Edun, insisting that the tough decisions the administration has made in the first year will bear results. “It does take time to have the positive results come through.:
Some of the early reforms have won some praise from the World Bank, and the government is hopeful that praise will translate to getting a significant grant that will boost its FX position.
“We are in a difficult place but the direction of movement is up and positive.”
