PRESIDENT Muhammadu Buhari has submitted a letter to the Nigerian Senate requesting approval to borrow $800 million from the World Bank to help alleviate the negative impacts of fuel subsidy removal.
Buhari’s letter was read by the Senate President, Ahmad Lawan, at the plenary session on Wednesday, May 10.
Buhari claimed the loan facility is intended to be used to support poor Nigerians and will be disbursed to poor households across the country.
He also claimed that the facility is an extension of the unconditional cash transfer being implemented by the Federal Government.
The President stated that the funds, when approved, will be sent to the bank accounts of the identified beneficiaries.
He also said the Federal Executive Council (FEC) has approved his request for obtaining the loan, noting that he is waiting for the approval of the Senate before going ahead with processing the loan.
The Nigerian government’s had announced in April that it had secured an $800 million World Bank grant to support 10 million households, or 50 million vulnerable Nigerians, as part of its subsidy palliative measures.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, who made the announcement, noted that the loan was intended to assist with the planned removal of subsidies in June 2023.
She said the government was working closely with the Presidential Transition Council and the incoming administration to execute the palliative program, which includes several considerations such as the provision of buses.
The President’s loan request contradicts an earlier position of the National Economic Council (NEC) which suspended the planned removal of subsidy on petroleum products by the end of the Buhari administration.
The NEC, which comprises the 36 state governors, the Governor of the Central Bank of Nigeria (CBN), and other co-opted government officials, had announced in April that subsidy cannot be removed for now.
The Council equally agreed on the need to continue discussions on the matter and the necessary preparatory work in conjunction with states and representatives of the incoming administration.
The Debt Management Office (DMO) recently announced that Nigeria’s debt profile as of December 31 is N46.25 trillion or $103.1 billion.
The DMO while giving the breakdown stated that there was an increase of over N7 trillion from what the country owned in 2021.