World Bank Approves $750m loan To Nigeria ￼
Written by Broad Admin on September 30, 2022
The World Bank yesterday approved $750 million International Development Association (IDA) credit to support the Nigeria State Action on Business Enabling Reforms (SABER) Program-for-Results.
The Washington-based institution which disclosed this in a statement yesterday, explained that the IDA credit would help Nigeria accelerate the implementation of critical actions that will improve the business enabling environment in states.
The approval of the credit by the multilateral institution came on same day the federal government declared that it was considering further fiscal policy actions in support of Micro, Small and Medium Scale Enterprises (MSMEs), as work progresses in the preparation of the Finance Act 2022 for the 2023 fiscal year.
The Vice President, Prof. Yemi Osinbajo, who was represented by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, at the 3rd Annual Lecture Series of the Development Bank of Nigeria (DBN), with the theme, “Thriving in the Face of Domestic and Global Disruptions,” disclosed this in Abuja.
According to the World Bank, Nigeria has made progress in advancing reforms to eliminate constraints in the business environment, especially through actions driven by the Presidential Enabling Business Environment Council (PEBEC).
However, it noted that Nigeria’s ability to attract domestic and foreign investment remains low compared to its peers.
“Nigeria’s 36 states and the Federal Capital Territory (FCT) are capable to catalyse private investment but vary significantly in their efforts and ability to do so. Given the importance of state-level reforms, the government developed a new program–SABER–to accelerate the implementation of critical actions that improve the business enabling environment in Nigeria’s states.
“The government’s SABER program builds on the successes of PEBEC. It aims to strengthen the existing PEBEC-National Economic Council subnational interventions by adding incentives, namely results-based financing to the states, and the delivery of wholesale technical assistance-available to all states-to support gaps in reform implementation,” it stated.
The bank explained that the Program-for-Results supports the most critical state-level business enabling reforms of the government’s SABER program.
The program is open to all states in Nigeria and FCT, given their ability to take concrete steps towards addressing major business-enabling environment challenges around land administration, regulatory framework for private investment in fiber optic infrastructure, public-private partnerships (PPP) and investment promotion frameworks and services, and business enabling regulatory environment, the World Bank added.
Commenting on the development, World Bank Country Director for Nigeria, Shubham Chaudhuri said: “Following the significant progress made by states on fiscal reforms through the State Fiscal Transparency, Accountability and Sustainability (SFTAS) program, the SABER program endeavors to offer similar support to the states to undertake critical business-enabling policy and institutional actions that will incentivize private sector development.
“Private sector investments remain the major vehicle to create more jobs, increase revenues to the states and improve social and economic outcomes for citizens.”
It noted that the program was in line with Nigeria’s National Development Plan (NDP) that sets an ambitious strategy to pursue sustained private sector-led economic growth that is aimed at generating 21 million full-time jobs and lifting 35 million people out of poverty by 2025.
SABER would support states to improve the efficiency of land administration, the regulatory framework for private investment in fiber optic infrastructure, the services provided by investment promotion agencies and PPP units, and the efficiency and transparency of government-to-business services.
The Task Team Leader for SABER, Bertine Kamphuis said: “Overall, the SABER program looks to consolidate and deepen business enabling environment reforms across more states.
“The use of the Program-for-Results model, which ensures disbursement of funds after achieving results, helps the government in strengthening its own program by incentivising institutional performance at the state level through results-based financing. States will be responsible for achieving the program results and thus will be leading the implementation of the program.”