FEC Approves $1.5 Billion World Bank’s Budget Support Loan

The Federal Executive Council (FEC) on Monday approved a $1.5 billion World Bank’s budget support loan, Naija News reports.

The Minister of the Economy, Wale Edun, after the FEC meeting on Monday, told pressmen that the loan facility was to help the federal government revive the nation’s economy.

The minister said the $1.5 billion loan facility would be provided by the International Development Association (IDA), a financing arm of the World Bank, and it is a low-interest instrument.

Edun also disclosed that the FEC approved $80 million in financing from the African Development Bank (AfDB) for the Ekiti Knowledge Zone Project EKZ and 30 days for the implementation of the government-organised Labour’s agreement on petrol subsidy removal palliatives.

He explained that the AfDB $80 million facility for the EKZ project is aimed at helping young people have better insight into a knowledge-based economy, technology and communications.

The minister said, “We approved today (yesterday) the application for financing from the World Bank and, in particular, the International Development Association, which is really virtually free or zero interest lending arm or financing arm of the World Bank. The total is $1.5 billion.

“The world today is one of high interest rates, as the developed world looks to fight inflation. They do it by restricting money and keeping interest rates high so that you can get inflation down. What that means is that interest rates, for everybody else, become not just high but very painful, if not unaffordable, within that context.

“Nigeria has been able to make the kind of macro-economic moves; has been able to take tough decisions to restore balance in the economy in the government’s finances that have warranted support and has elicited even support from the multilateral development banks. It is on the basis of that that the World Bank is willing to consider and process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.

“That was what was presented to the Federal Executive Council, and the members approved that we go ahead with that financing given that it is affordable.

“Secondly, an $80 million financing from the African Development Bank was also approved by the Federal Executive Council. This financing is for a project in Ekiti called the Ekiti Knowledge Zone Project EKZ. An EKZ that is basically to support young people and their quest to take on technology, to use it to be employed, to be trained and to benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.”