In a recent event assessing Nigeria’s economy over the past six months, the World Bank clarified that the approved $800 million loan was granted in December 2021.
The loan was sought during the period when the Nigerian government, under President Muhammadu Buhari, was considering the removal of fuel subsidies.
Dr. Shubham Chaudhuri, the Country Director of the World Bank in Nigeria, emphasized that the funds are in the form of a loan, not a grant as previously speculated.
The loan is intended to alleviate the hardships faced by the poor and vulnerable resulting from the removal of the fuel subsidy.
The disbursement of the loan was delayed as President Buhari postponed the removal of the subsidy until his final days in office. Shortly before his handover, Buhari submitted a letter to the Senate, seeking approval for the $800 million loan from the World Bank to mitigate the effects of subsidy removal.
Former Minister of Finance, Budget, and National Planning, Zainab Ahmed, stated that the loan would be disbursed in anticipation of the planned subsidy removal in June 2023.
Upon his inauguration, President Bola Tinubu eventually announced the removal of the petrol subsidy, which was followed by the Nigerian National Petroleum Company (NNPC) Limited adjusting petrol prices within 48 hours of the announcement.
Dr. Chaudhuri, the World Bank Country Director, expressed support for the Federal Government’s decision to remove the subsidy and unify the exchange rate.
He acknowledged that while the policy may cause temporary discomfort, it is crucial for rebuilding the nation’s economy.
