To achieve and sustain economic recovery and growth, Nigeria needs to deepen economic reforms and boost government revenues the World Bank has said.
Nigerians cannot simply wait for oil prices to recover as happened during the last crisis in 2016 to rebuild the economy, particularly with the health crisis caused by the pandemic, after a coronavirus-induced oil price shock slashed income and weakened Nigeria’s currency, the World Bank’s country director Shubham Chaudhuri told Reuters.
Chaudhuri said the World Bank is considering a $3 billion budget support loan for Nigeria, which would cover around half of the country’s external financing shortfall. He added that approval was expected within the next three to four months. “To wait for oil prices to recover will be short-sighted and I think the government recognises this. It helps us make the case for providing the kind of financing the government has requested,” he said.
Chaudhuri commended the government for demonstrating transparency by disclosing how big a deficit it was expecting this year, unlike in previous spending plans, which is a step in the right direction.
He further welcomed the government’s decision to move gasoline and electricity prices to more market-reflecting tariffs, as this would help free up funds for healthcare and infrastructure.
On the Central Bank of Nigeria’s efforts to unify its multiple exchange rate, Chaudhuri noted that the move would be supportive of reforms and help attract foreign investment to boost sustainable recovery. “Now is the time for political courage to be displayed in making the right trade-offs. We see the policy intent and commitment and we are hopeful,” he said.