In an official statement, the World Bank has confirmed that it approved an $800 million loan to the Nigerian government in December 2021.
The loan was granted during a period when President Muhammadu Buhari's administration was considering the removal of fuel subsidies.
Shubham Chaudhuri, the Nigerian Country Director of the World Bank, shared this information during a recent event organised by the bank to evaluate the nation's economic performance over the past six months.
Chaudhuri emphasised that the funds provided by the World Bank are in the form of a loan, contrary to earlier speculations suggesting it was a grant. He further explained that the loan is intended to alleviate the hardships faced by the poor and vulnerable population resulting from the elimination of the fuel subsidy.
The disbursement of the loan had experienced delays due to President Muhammadu Buhari's hesitation in removing the fuel subsidy until the final days of his presidency. Shortly before his handover, Buhari sent a letter to the Senate seeking approval to secure an $800 million loan from the World Bank to mitigate the effects of subsidy removal.
Zainab Ahmed, the former Minister of Finance, Budget, and National Planning, had previously stated that the loan's release was contingent upon the planned removal of subsidies in June 2023.
Following his inauguration on May 29, President Bola Tinubu ultimately announced the removal of petrol subsidies. In response, the Nigerian National Petroleum Corporation (NNPC) Limited, within 48 hours of Tinubu's declaration, announced a price adjustment for petrol.
The World Bank Country Director, Dr. Chaudhuri, expressed support for the Federal Government's decision to remove subsidies and unify the exchange rate. Despite acknowledging I the painful nature of the policy, he believes it is a crucial step towards rebuilding the nation's economy.