World Bank Disburses $300 Million Palliative Loans

The World Bank has started paying the authorized $800 million for the National Social Safety Net Program-Scale Up.

Naija News learnt on Wednesday that approximately $299.99 million has been disbursed to Nigeria under the approved National Social Safety Net Programme-Scale Up, which the World Bank sanctioned on December 16, 2021.

Documents from the World Bank confirmed the recent payment, indicating that about 37.5 percent of the total loan has been disbursed, leaving a remaining balance of approximately $442.88 million.

The $800 million social safety net program involves conditional cash transfers and is slated to be executed by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation. The aim is to implement a monthly cash transfer program for economically disadvantaged Nigerians who have been adversely affected by recent policies, such as the removal of the fuel subsidy.

In October 2023, President Bola Tinubu officially launched the promised conditional cash transfer program, targeting 15 million households nationwide to receive N75,000 within three months.

The document also reveals that the Federal Government is currently in the process of engaging the services of a consulting firm to assist in upgrading the system for the cash transfer program.

The document partly read, “The Federal Republic of Nigeria has received financing from the World Bank toward the cost of the National Cash Transfer Office under the Federal Ministry of Humanitarian Affairs & Poverty Alleviation and implementing agency of the Client and intends to apply part of the proceeds toward payments under the contract for Upgrade of MIS for NASSP-SU.”

“The consulting services (“the Upgrade of MIS for NASSP-SU”) include carrying out the development, implementation, deployment, and maintenance of a user-friendly, interactive, web-based MIS System to support the activities of NASSP – -SU of the Federal Republic of Nigeria for effective and efficient delivery of Programme benefits to the Poor and Vulnerable.

“For the estimated level of effort (professional staff months) as contained in the TOR, for an implementation period of 120 days plus warranty and after-sales service; the expected start date of assignment should be in the next three months from the advert date.”

The necessity for this upgrade arises from the decision of the National Economic Council not to utilize the social register from the previous administration of Muhammadu Buhari for implementing the conditional cash transfer program, citing credibility concerns.

The financing agreement document for the National Social Safety Net Program-Scale Up, observed by our correspondents, reveals that the Federal Republic of Nigeria and the International Development Association of the World Bank have agreed to repay the $800 million loan in instalments. The first payment is scheduled for January 15, 2027, while the final payment is due on July 15, 2051.

As outlined in the document, the loan acquired by the Federal Government carries a maximum commitment charge rate of one-half of one per cent per annum on the Unwithdrawn Financing Balance. Additionally, a service charge of three-fourths of one per cent per annum is applicable to the withdrawn credit balance, and the interest charge stands at one and a quarter per cent per annum on the withdrawn credit balance.

The document also discloses that a percentage of the principal amount of the loan, alongside other charges, is expected to increase over time. The initial payment will constitute 1.65 per cent of the principal amount, while the final payment will amount to 3.40 per cent.