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The Nigerian federal government is actively addressing the fiscal gap in the 2023 budget by finalizing plans to secure a fresh $1.5 billion loan facility from the World Bank. This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, during the ongoing 2023 Annual Meetings of the World Bank and the International Monetary Fund (IMF) in Marrakech, Morocco.
Mr. Edun also shared that he has assumed the role of chair of the Africa Group 1 constituency and is leading all African nations in the executives of the IMF. He emphasized that Nigeria has become a prominent destination for investment.
Elaborating on the $1.5 billion budget support from the World Bank, Mr. Edun explained that it is an attractive funding source with favorable terms, potentially featuring a zero interest rate. This financial support aims to bridge the fiscal gap in the 2023 budget.
The minister stated, “In this particular case, it has long been in the pipeline, and we are hoping that funding will come through soon. There is a Federal Executive Council meeting on Monday (tomorrow) that should be able to discuss this, as well as other initiatives for financing on reasonable terms. We have talked about the high costs of money – the World Bank money is the cheapest.”
He further emphasized that Nigeria has taken significant steps to attract investments, and the country is now highly regarded for investment opportunities.
Mr. Edun also assured that the government is making efforts to reduce its expenditure. This includes tax reform initiatives, addressing expenditures on taxes, waivers, duties, and tax exemptions. The recent formation of a fiscal policy and tax reform committee by the federal government underscores the focus on domestic revenue mobilization.
Regarding “Ways and Means,” a method of borrowing from the central bank, Mr. Edun reaffirmed President Bola Ahmed Tinubu’s commitment to adhere to statutory limits, ensuring the rule of law is upheld. The government aims to come within the statutory limits as soon as possible.
Mr. Edun pledged to establish a harmonious relationship between monetary and fiscal policies, highlighting that there is a natural coordination between these two aspects.
Moreover, he shared his accomplishment as the chair of the Africa Group 1 constituency in the IMF, emphasizing the significance of increased representation in the governance of these important international institutions by African nations in Sub-Saharan Africa.
Mr. Edun acknowledged the challenges faced by Nigerians due to reforms like the removal of fuel subsidies and exchange rate unification. He assured that the government is implementing interventions to alleviate hardship and improve the lives of citizens, such as increasing food production, releasing fertilizers, and promoting Compressed Natural Gas (CNG) transportation.
The reforms aim to transition to affordable and cleaner energy, aligning with market prices and value.
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