News Column

Finally, Nigeria Gets Expanded Borrowing Windows With IBRD, IDA

July 8, 2014

James Emejo

At last, the World Bank has found Nigeria credit worthy and accorded it with the much anticipated 'Blend Status', allowing the country to now seek developmental loans from both the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD). The country officially entered blend status on July 1, 2014.

This was contained in the Bank's new Country Partnership Strategy (CPS) for 2014 to 2017 which was launched yesterday in Abuja.

It stated:"Nigeria was declared creditworthy for IBRD financing in FY2013 and is officially entering blend status in FY2014."

Essentially the new status implies that the country would have the opportunity to access loans from both the IDA and the IBRD within a particular period, but on different repayment conditions.

Before now, the country was only eligible to borrow from the IDA window which offers a 40-year payment plan with a 10-year grace period at no interest rate charge. Beneficiaries only pay a service charge of about 0.75 per cent.

With the new status, however, the country would have to adjust to a new IDA repayment plan of 25-year repayment period instead of 40-years while the grace period would also move down from 10 years to five years as well as an interest rate change of about 1.3 to 1.5 per cent.

Nevertheless, CPS is intended to support both the federal and state governments boost development initiatives for Nigerians.

The new partnership strategy, jointly developed with the government of Nigeria, is supportive of the country's Vision 20: 2020 plan and its Transformation Agenda which set out Nigeria's long-term development objectives and the medium-term strategy for operationalising this vision including support for a bold and ambitious programme of development targets and interventions for the next four years.

The new CPS focuses on promoting growth and job creation by reforming the power sector, enhancing agricultural productivity, and increasing access to finance.

It also aims to improve the quality and efficiency of social service delivery at the State level to promote social inclusion as well as strengthening governance and public sector management, with gender equity and conflict sensitivity as essential elements of governance.

Speaking at the launch in Abuja, Coordinating Minister for the Economy and Minster of Finance, Dr. Ngozi Okonjo-Iweala said:"The CPS is very commendable and in line with the Transformation Agenda of the federal government. It supports our development objective, helping in starting a housing revolution in the country."

She added that the new CPS had become attractive by helping to create jobs by investing productive sectors including agriculture and power sector as well as access to finance and revolution in housing among others. She said the Breton woods institution's financial assistance on annual basis had been rapid in the country.

According to her, total World Bank interventions in the country had increased from an annual $80 million in 2000 to a projected $1.7 billion in 2014.

World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly said:"The new strategy is a joint product, developed in close consultation with the government of Nigeria and stakeholders under the Country Assistance Framework, a strategic platform developed by Nigeria's partners to coordinate interventions and leverage resources to deliver strong results and development solutions.

"It reflects Nigeria's development aspirations and commits the World Bank Group to working hand-in-hand to unleash Nigeria's potential for the benefit of all Nigerians."

Also at the launch, Governor of Kogi State, Mr. Idris Wada said the World Bank had being of tremendous assistance to his state with projects such as Export Processing Zone, Fadama, Community Social Development, Youth Employment and Social Safety Operations(YESSO) among others.

Also, Governor of Edo State, Adams Oshiomhole described the Bank as a useful partner and expressed appreciation for the work being done in his state in the areas of agriculture, health, infrastructure, flood and erosion control as well as open governance.

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Source: AllAfrica

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