Business & Finance

Nigeria Eyes $1.5 Billion World Bank Loan to Strengthen Naira and Bolster Budget

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Nigeria Eyes $1.5 Billion World Bank Loan to Strengthen Naira and Bolster Budget

In a bid to address the ongoing challenges posed by a severe dollar shortage and stabilize the declining naira, Nigeria’s Finance Minister, Wale Edun, has revealed plans to seek financial assistance from the World Bank. The government aims to secure a substantial aid package of $1.5 billion, with hopes of receiving between $1 billion to $1.5 billion for crucial budgetary support.

Finance Minister Edun expressed confidence in the country’s economic reforms and disclosed that Nigeria might also consider issuing a Eurobond later in 2024. Eurobonds, denominated in foreign currencies, serve as a strategic tool for Nigeria to navigate its financial landscape amidst challenging economic conditions.

“We are in discussions at the moment, but we anticipate receiving the support because of the steadfast implementation of our reforms,” stated Minister Edun.

Nigeria has a history of utilizing Eurobonds to raise debt for infrastructure development and economic stimulation. In 2022, the nation entered the international debt markets with a $1.25 billion Eurobond issuance, marking its eighth venture into this financial arena, according to the Debt Management Office.

READ ALSO: World Bank Reports a 7% Drop in Nigeria’s Extreme Poverty, Crediting Internet Access for Transformation

The urgency for financial support comes as the naira reached a record low of N1,320 per dollar on Wednesday, driven by robust demand on the parallel market. The domestic currency depreciated by 4.72%, closing at N878.57 to a dollar at the end of the business day, based on official data from NAFEM, where forex is traded.

Minister Edun emphasized that the current economic reforms and commitment to fiscal responsibility make Nigeria deserving of international support. The government’s proactive approach aims to strengthen the naira, boost the economy, and ensure sustainable development.

As the nation navigates these economic challenges, the possibility of securing a World Bank loan and exploring Eurobond issuance remains a pivotal part of Nigeria’s strategy to achieve financial stability and promote economic growth.

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