World Bank director, Chaudhuri backs Nigeria's $800m loan amid criticism

The World Bank Country Director for Nigeria, Shubham Chaudhuri backs Nigeria’s decision to borrow $800 million from the international finance body.

And this comes amid criticism from a cross-section of Nigerians who have called on the FG to rescind the move.

According to Nigeria’s Minister of Finance, Zainab Ahmed, the aim of the loan was to use as palliatives for 50 million vulnerable Nigerians who would be affected by the effects of the subsidy removal.

The FG, after envisaging the effects of the subsidy removal had keyed into a project tagged National Social Safety Net Programme – Scale Up, a shock-responsive safety net support project developed by the International Development Association, IDA of the World Bank.

While stakeholders in Nigeria have rejected the move, Chaudhuri, however, noted that the loan was very important to Nigeria as the country was in a difficult situation as it had to finance its ₦10.7 trillion budget deficit.

Recently, the Socio-Economic Rights and Accountability Project (SERAP) had written to the World Bank asking the organization to reject the FG’s application seeking the $800 million loan.

According to the body, it said the Buhari administration’s reason for seeking the $800 million loan was not justified thus the need to instead, have a discussion with the incoming administration regarding the issuance and use of the loan.

Chaudhuri's argument centred on Nigeria’s ability to finance the deficits. He said Nigeria’s deficit has been projected to hit ₦10.7 trillion or ₦12 trillion all depending on when the FG finally decides to do away with fuel subsidy.

“Everyone needs to be clear on the fact that whether Nigeria receive the $800 million world bank loan or not, 2023 Nigeria’s budget is already having a projected deficit of ₦10.7 trillion, that is if the fuel subsidies are removed by June but if not, the deficit would be ₦12 trillion or more. The deficits have to be financed; the fact is that Nigeria would be taking more debts to finance its budget deficits. Unfortunately, with revenue still being low as they are, Nigeria has no choice.” He said.

Chaudhuri also revealed that for now, the $800 million loan from the World Bank is about the cheapest and most affordable offer for Nigeria when compared to loans from other sources.