Nigeria needs more currency reform to access $1.5bn loan, says World Bank director

Shubham Chaudhuri, World Bank country director for Nigeria, says Nigeria needs more monetary reform in order to access $1.5 billion loan.

In November, the naira weakened at N500 to the dollar in the parallel market. The Central Bank of Nigeria (CBN) devalued the official rate by 15 percent in March and weakened the foreign exchange rate for exchange bureau in November and in March.

Zainab Ahmed, the minister of finance, budget and national planning,  had said that the federal government has fulfilled the conditions required for the World Bank loan.

Speaking with journalists on Thursday, Chaudhuri (pictured) said Nigeria needs to make plans for sustainability in later years.

“Think of it this way, when you have say a 10 or 15 billion dollar hole, 1.5 billion dollars is just a little bit of that, the question is how is the rest of that hole being made up?” he said.

“What is the sustainability in 2021 and beyond? And that is why we are thinking about the overall prospects going forward, in terms of the macro adequacy and the flexibility and exchange rate management.”

Chaudhuri said the Bretton Wood institution acknowledged the effort Nigeria had made, but the country still needed  to do more.

“That is why our shareholders and our management are still saying we recognise how much Nigeria has done, but for this $1.5 billion to really be a part of the larger effort to put Nigeria on a sound macro-fiscal footing going forward, there needs to be a little bit more,” he said.

He also said that the World Bank was working on another $1.5 billion loan different from the budget support loan, which was two different $750 million funds to support state governments’ efforts, to be approved on December 14.

They include the states fiscal transparency accountability and sustainability (SFTAS) programme and the Nigeria COVID-19 action recovery and economic stimulus (CARES) programme.