Nigeria is in the process of taking a fresh $750 million loan, from the World Bank to help states overcome the effect of COVID-19.
Minister of Finance, Budget, and National Planning, Zainab Ahmed, announced this in Abuja on Friday.
She said the loan would be used to stimulate the local economy and support vulnerable household consumption.
Ahmed spoke at the inauguration of the Federal Steering Committees of the Nigeria COVID-19 Action Recovery and Economic Stimulus (N-CARES) programme.
She said the federal government has created windows of intervention, as captured in the economic sustainability plan inaugurated by President Muhammadu Buhari, in March 2020.
She stressed that in going to borrow the money the federal government is considering the cause and consequences of civil unrest and COVID-19 in the country.
“The consequences will be too high if we ignore the root cause of rising civil unrest in our country. We must, therefore, fashion out ways of ensuring that post-Covid-19 is not injurious to the Nigerian people and the economy,” she stated.
The minister stated that the government has carefully selected the “members of the Federal Steering and Technical Committees because of the important role MDAs play in the recovery of the Nigerian economy.
She also said the committee will help achieve government goal of lifting 100 million people out of poverty”.
“The inauguration of the committee is expedient given the nature of this emergency intervention.
“Nigeria as the biggest economy in Africa cannot afford to remain in recession.
“The survival of over 200 million population is germane to all we do and we must address the concerns of the majority of our populace”.Zainab Ahmed added
It is great that Nigeria, through the Federal Steering Committee of the Nigeria COVID-19 Action Recovery and Economic Stimulus (N-CARES), is planning to stimulate the local economy and support vulnerable household consumption. However, we should consider securing the loan from local bonds rather than from external sources. Proceeds from local bonds or loans will be used to further develop the local economy unlike proceeds paid to external sources.
A good indication that local sources can support this loan is the over-subscription of the last Federal Government of Nigeria Roads Sukuk Bond of N150.0 Billion. It was oversubscribed more than 400%, which means there was over four times money for loan than the Government required.