Nigeria: World Bank Distributes $300 Million In Palliative Loans

World Bank disburses $300 million in palliative loans for the National Social Safety Net Program-Scale Up. On Wednesday, the bank initiated the payment, releasing approximately $299.99 million to Nigeria under the program approved on December 16, 2021. Documents from the World Bank confirm the recent disbursement, marking 37.5% of the total $800 million loan, leaving a pending balance of around $442.88 million.

This social safety net program, a conditional cash transfer, is set to be implemented by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation. The aim is to support poor and vulnerable Nigerians affected by recent policies, including the fuel subsidy removal.

President Bola Tinubu launched the conditional cash transfer program in October 2023, targeting 15 million households nationwide to receive N75,000 within three months. The Federal Government is currently in the process of hiring a consulting firm to upgrade the system for the cash transfer program.

According to the financing agreement, the repayment for the $800 million loan will occur in installments, starting on January 15, 2027, and concluding on July 15, 2051. The loan carries a maximum commitment charge rate of one-half of one percent per annum on the Unwithdrawn Financing Balance, a service charge of three-fourths of one percent per annum on the withdrawn credit balance, and an interest charge of one and a quarter percent per annum on the withdrawn credit balance.

Additionally, a percentage of the principal amount, along with other charges, will increase over time, ranging from 1.65% for the first payment to 3.40% for the last payment. The National Economic Council decided not to use the social register from the previous administration due to credibility issues, necessitating the upgrade of the Management Information System for the National Social Safety Net Program-Scale Up.