Nigeria to settle $800m World Bank loan for 25 years

The next administration after the regime of the President, Major General Muhammadu Buhari (retd.), will begin the repayment of the $800m loan approved by the World Bank as subsidy palliative.

Last week, the Minister of Finance, Budget and National Planning, Zainab Ahmed, revealed to newsmen that the Federal Government had secured $800m from the World Bank to provide post-petroleum subsidy palliatives for over 50 million Nigerians ahead of June 2023.

The financing agreement document for the National Social Safety Net Programme – Scale Up between the Federal Republic of Nigeria and the International Development Association of the World Bank was made available on Tuesday.

The objective of the project is to expand coverage of shock-responsive safety net support among the poor and vulnerable and strengthen Nigeria’s national safety net delivery system till June 30, 2024.

The document signed by the Nigerian finance minister and the World Bank Country Director for Nigeria, Shubham Chaudhuri, on August 16, 2022, revealed that the loan was concessional financing.

According to the World Bank, concessional finance is below-market-rate finance provided by major financial institutions, such as development banks and multilateral funds, to developing countries to accelerate development objectives. The $800m loan obtained by the Federal Government attracts a maximum commitment charge rate of one-half of one per cent per annum on the Unwithdrawn Financing Balance, and a service charge of three-fourths of one per cent per annum on the withdrawn credit balance, according to the document.

It also disclosed that the interest charge is one and a quarter per cent per annum on the withdrawn credit balance.

Also, a percentage of the principal amount of the loan is expected alongside the other charges, and this will increase over time.

While the first payment will be 1.65 per cent of the principal amount, the last payment will be 3.40 per cent of the principal amount.

The payment dates are January 15 and July 15 in each year, starting from January 15, 2027, with payments in dollars.

The repayment will be made in installments, with the first payment due on January 15, 2027, and the last payment due on July 15, 2051.

Nigeria is expected to have a new president from May 29, 2023. This means that the next administration is expected to begin the repayments for the $800m loan.

Source: Nigeria to settle $800m World Bank loan for 25 years – StocksWatch (stocksng.com)

Related Posts

03

Nov
Business & Economy

ELITE WEALTH PLACEMENT FUND

Welcome to the Elite Wealth Placement Fund – a bespoke investment vehicle designed exclusively for high-net-worth individuals seeking attractive and tailored placement opportunities. Our fund is managed by a team of seasoned financial experts with a proven track record of delivering superior returns, while prioritizing risk management and long-term wealth preservation. As an exclusive member, you will […]

03

Nov
Business & Economy

PZ Cussons Nigeria Plc reports N113bn revenue, boosts profit after tax by 114% in one year

The Audited Financial Statement of PZ Cussons for the year ended 31 May 2023 show significant growth in the Company’s bottom line figures with 114% growth in its profit after tax for the 12 months period. The Group reported revenue of N113.964 billion for the 12 months period, up by 14.53% from N99.503 reported the previous year.[…]