President Muhammadu Buhari has requested the Senate’s approval for Nigeria to borrow an $800 million loan from the World Bank. The loan is expected to fund Nigeria’s social investment program aimed at helping the country’s poor and vulnerable populations. The president made the request in a letter read out at plenary by the Senate’s president, Ahmad Lawan, on Wednesday.
Buhari explained that the loan would enable his government to continue with the conditional cash transfer window of the social investment program. Under the program, the government plans to transfer N5,000 per month to 10.2 million poor and low-income households for six months. The move is expected to have a multiplier effect on about 60 million individuals.
The president emphasized that digital transfers would be made directly to beneficiaries’ accounts and mobile wallets to ensure the credibility of the process. He noted that the social investment program would expand coverage of shock-responsive safety net support among the poor and vulnerable Nigerians. This would assist them in coping with the costs of meeting basic needs.
The National Social Safety Net Programme (NASSP) is a social intervention program that aims to stimulate activities in the informal sector, improve nutrition, health, education, and human capital development of beneficiary households. The loan from the World Bank will enable the NASSP to expand its reach to more people in need.
While speaking at the International Conference Centre in Abuja, the Director-General of the Budget Office of the Federation, Ben Akabueze, expressed concern about Nigeria’s debt profile. He noted that the nation’s debt profile was becoming unsustainable, stating that the country’s debt service ratio was pushing towards 100 percent.
Akabueze pointed out that Nigeria needed to spend about $100 billion annually, including private spending on infrastructure, to fix the country’s infrastructural needs. However, the aggregate budget of the federal government is only about $30 billion, and the aggregate of the states and FCT budget doesn’t even add up to the federal budget.
While Nigeria’s debt to GDP ratio may not be high, the country’s revenue is too small to sustain the size of its debt. As a result, Nigeria has very limited borrowing space, and the loan from the World Bank will provide much-needed funding for the country’s social investment program.
In conclusion, the $800 million loan from the World Bank is a step in the right direction towards helping Nigeria’s poor and vulnerable populations. It will enable the government to expand the reach of its social investment program and improve the lives of millions of Nigerians. However, there is a need for caution in borrowing to ensure that Nigeria’s debt profile remains sustainable.