The Federal Executive Council (FEC) has approved the World Bank’s $1.5 billion budget support.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced this on Monday while briefing reporters after the federal cabinet meeting in Abuja.
He also said the council approved $80 million financing from the African Development Bank (AfDB) for the Ekiti Knowledge Zone Project (EKZ) to help the young people in the sector of knowledge economy, technology and communications.
He said, “We approved today the application for financing from the World Bank and in particular, the International Development Association, which is really virtually free or zero interest lending arm or financing arm of the World Bank.
“The total is $1.5 billion. And the background is just as you heard from the Minister of Budget and National Planning. The world today is one of high interest rates, as the developed world looks to fight inflation. They do it by restricting money, and keeping interest rates high so that you can get inflation down. What that means is that interest rates for everybody else, become not just high but very painful, if not unaffordable within that context.
“Nigeria has been able to make the kind of macroeconomic moves, has been able to take the tough decisions to restore balance in the economy in the government’s finances that have warranted support and has elicited even support from the multilateral development banks and is on the basis of that, that the World Bank is willing to consider and to process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.”
Edun said the $80 million financing from the African Development Bank was for financing the Ekiti Knowledge Zone Project EKZ to support young people and their quest to take on technology, to use it to be employed, to be trained, and to benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.”
On why Nigeria had continued to borrow, Edun said, “Concessionaire is cheap and it is needed.”
On whether the federal government would consider the IMF’s advice to increase taxes and interest rate, the minister said, “We are looking to take advice that said ‘grow your revenue.”
