Nigeria will know its fate regarding a new $1.5 billion credit facility request from the World Bank in late July as it seeks funds to deal with the fallout of the coronavirus pandemic, the multilateral lender said in an interview on Friday.
The World Bank is planning stimulus packages estimated to be $3 billion for Nigeria, which is grappling with what the Bank describes as its greatest fiscal crisis in four decades, triggered by the virus and the global oil crash.
Nigeria’s indebtedness to the World Bank group stands at around $10.102 billion on Friday., according to the debt office.
“We were hoping to present to our board by late July or latest early August, because the government will need the finance,” Shubham Chaudhuri, World Bank’s Nigeria country director, told Reuters.
“The immediate challenge is a fiscal one: How does the government marshal the fiscal resources to keep basic government functions going?” Chaudhuri said.
Finance Minister Zainab Ahmed forecasted on Thursday the country’s economy could contract by 8.9% this year.
World Bank’s own projection hovers between 3.2% and 8% while government’s revenue form oil, which provides about 65% of Africa’s largest economy’s income, might plunge by one third or probably more than 50%, Mr Chauduri said.
The 2016 recession in Nigeria caused 13 million people to lose their jobs while the current crisis might be “much more pronounced,” Marco Hernandez, World Bank’s lead economy on Nigeria said.
“We have been recommending a move towards a unified exchange rate and a more flexible exchange rate for some time,” he said, adding that it would help economic rebound and enhance investors’ confidence.
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