A report by the World Bank has noted that the devaluation of Nigeria’s naira led to a foreign exchange gain of N8.6bn for the Nigeria Identification for Development project.
The ID4D project, launched in 2020 with a $430m budget, seeks to register all Nigerians in the National Identification Number system.
Backed by the International Development Association, French Development Agency, and European Investment Bank, the initiative has received funds in multiple instalments since December 2021, with additional disbursements pending.
The financial report stated that euro and dollar-denominated accounts, managed by the Central Bank of Nigeria and NIMC, received funds from international financiers.
The document stated that the NIMC and CBN received $2.538m and €3.03m respectively during the period ending December 31, 2023.
These accounts facilitated the implementation of project activities by converting the funds to naira through the CBN Autonomous Foreign Exchange Market and depositing the equivalent amount into NIMC’s naira drawdown accounts for the Project Implementation Unit.
“During the period, the project’s transactions were carried out in local currency. A foreign exchange gain of N8,607,679,554.68 is recognised,” the report stated.
The financial report showed that the exchange rate for the dollar rose from N448.05 at the beginning of the year to N898.8 by year-end. Similarly, the euro exchange rate increased from N478.3 to N993.9 over the same period.
The naira devaluation has increased NIMC’s funding, with exchange rates now at N1,600/$1 and N1,750/€. This increased funding will allow NIMC to complete several outstanding project tasks, ultimately strengthening the project’s infrastructure and improving its efficiency.
As of June 2024, the project’s disbursement rate was 37.37 per cent, according to the Bretton Woods Institute, indicating that only $160.7m of the $430m budget has been utilized.
To achieve full disbursement and meet the project’s goals, the bank recently announced a restructuring and extension of the project to 2026, which was initially set to conclude on June 30, 2024.
This decision comes amid threats from the French Development Agency and the European Investment Bank to withdraw their funding if the World Bank ceases to be the project’s implementor.
Nigeria has faced challenges in meeting project targets, including the issuance of 148 million NINs by June 2024.
As of May, the number of NINs had risen to 107.34 million, according to NIMC Director-General, Abisoye Coker-Odusote.
In its July project restructuring document, the World Bank revealed that Nigeria had not yet fulfilled a key condition for additional funding disbursement.
Specifically, the Bank noted that the Nigerian government needed to amend the NIMC Act to establish an inclusive and non-discriminatory legal framework, a requirement still pending.
The Nigerian Senate had advanced a bill to repeal the National Identity Management Commission Act of 2007, passing it to the second reading stage last month.
The proposed legislation, introduced by Deputy Senate President Barau Jibrin, aims to enhance the efficiency and inclusivity of the country’s identity management system.
The bill seeks to achieve this by providing comprehensive provisions that align with global best practices and updating and improving existing regulations.
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