World Bank approves $1.5 billion loan for Nigeria as Inflation Hits 14.89 Percent

The World Bank has approved Nigeria’s request for a $1.5 billion loan, as rising cost of goods and services amid insecurities and currency devaluation has pushed headline inflation in Africa’s largest economy to a record-high in the month of November

The loan is designed to strenghten the West Africa nation’s economy.The loan facility is a five-year Country Partnership Framework (CPF) that will last till 2024.

The Bretton Woods institution Bank Board of Directors approved the $1.5 billion for two projects, which include: Nigeria Covid-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES) and the State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS).

The CPF will focus on four areas of engagement which include investing in human capital by increasing access to basic education, quality water, and sanitation services; improving primary healthcare; and increasing the coverage and effectiveness of social assistance programs.

It will also focus on boosting digital infrastructure, and developing economic corridors and smart cities, to provide Nigerians with improved livelihoods.

For Nigeria to realize its long-term potential, they has to make tangible progress on key challenges and pursue some bold reforms. Why world bank engagement will focus on supporting Nigeria’s efforts to reduce poverty and promote sustained private sector-led growth.”

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According to the National Bureau of Statistics (NBS) report,Food Index rose by 18.30 percent in November, up from 17.38 percent in October. Increases were recorded in Bread and cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits, Vegetables and Oils and fats.

The average annual rate of change of the Food sub-index for the twelve-month period ending November 2020 over the previous twelve-month average was 15.75 percent, 0.33 percent points from the average annual rate of change recorded in October 2020 (15.42 percent).

What is the cost of Nigeria inflation

1. The wide foreign exchange rate when compared to global counterparts has made imported goods expensive and practically unaffordable due to the weak household income and the negative impact of COVID-19 on Nigerians.

2. Insecurities in certain parts of the country have prevented farmers from going to their farms. This coupled with the recent flooding that eroded rice harvest plunged food availability and subsequently increased prices of the few available food items.

 

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