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Repayment of Nigeria's $800 million World Bank loan to end in 2051

Nigeria’s plan to provide palliatives for the country’s citizens due to the planned subsidy removal may cost the country 25 years of indebtedness to the world bank.

Repayment of Nigeria's $800 million World Bank loan to end in 2051

Recall the Honourable Minister of Finance, Zainab Ahmed earlier announced that the federal government had secured an $800 million loan facility from the World Bank.

This loan according to her, was the first batch of the palliatives to be disbursed to about 50 million vulnerable Nigerians who would be worse hit by the effects of the subsidy removal.

The World Bank project tagged National Social Safety Net Programme – Scale Up, a project of the International Development Association, has the objective of expanding coverage of shock-responsive safety net support among the poor and vulnerable.

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The Hon Minister, Zainab Ahmed signed for Nigeria while the World Bank Country Director for Nigeria, Shubham Chaudhuri signed on behalf of the World Bank on August 16, 2022.

The document also revealed the project will be based on concessional financing.

Major financial institutions, such as development banks and multilateral funds are known to provide concessional financing, below-market-rate finance aimed to help developing countries accelerate development objectives.

The first payment which is due on January 15, 2027, will attract 1.65 per cent of the principal amount, while the last payment which is due on July 15, 2051, will be 3.40 per cent of the principal amount.

Also, a percentage of the principal amount of the loan which will increase over time is expected alongside the other charges. The repayment which is in dollars will commence on January 15, 2027, and will be made on January 15 and July 15 of each year.

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