The World Bank announced yesterday that it approved $2.1 billion in concessionary loans to fund projects in Nigeria aimed at improving access to electricity and promoting governance.
It said the loans approved by the International Development Association (IDA), the bank’s low-interest arm, are expected to support Nigeria’s economic growth plan.
In addition to the loans, it also approved a $7m grant for nutrition.
This comes as growth rates in Nigeria bounced back since the third quarter of 2016 at the end of the country’s first recession in 25 years.
Though growth slowed again in the first quarter of 2018 due to non-performance of the non-oil sector, the government expects growth to rise to a pre-recession level of seven per cent by 2020.
The World Bank said more than half of the loans would be used to fund power and climate change projects and boost fiscal transparency.
Nigeria privatised most of its power sector in 2013 but retained control of its dilapidated monopoly transmission grid, which has been blamed for hobbling growth.
Reuters reports that the Nigerian government intends to raise $2.8bn of debt offshore to help part-finance its 2018 budget and plans to explore all options to lower costs.
To achieve this, the debt office plans to tap capital markets or concessionary loans from the World Bank in implementing the 2018 budget.