Bank loan

States to secure $750m W’Bank loan in December

Nigerian states are to secure the first tranche of a $750 million loan from the World Bank by December 2022, The punch has learned.

In the State Action on Business Enabling Reforms final report, which is available on the World Bank website, it was revealed that around $0.5-4 million would be disbursed to Nigerian states based on certain criteria.

The new loan comes from an instrument of the program for results within the framework of the State’s action on business-friendly reforms.

According to the World Bank, the program would run from 2023 to 2025. It will rely on the Presidential Enabling Business Environment Council.

The program aims to improve the efficiency of land administration, the regulatory framework for private investment in fiber optic infrastructure, the services provided by investment promotion agencies and public-private partnership units. It also aims to ensure the efficiency and transparency of government services to business in participating states.

The report said in part: “This proposed lending operation of $750 million will last from 2023 to 2025 and consists of: (1) a performance-based financing component of $730 million for state governments, which will be implemented as a results-based program; and (2) a $20 million technical assistance component that will be implemented as investment project financing to support implementation and capacity building.

Disbursement will be in line with certain disbursement-related indicators, which means that states are expected to meet certain criteria to qualify for each disbursement under this program.

The report notes that “achievement of each prior result will result in the indicative disbursement of an allocation of $0.5 to $4 million (for certain stretch targets).”

The main conditions are the improvement of the efficiency of property registration and the sustainability of support for the process of land investment in a state.

This program is similar to the State Fiscal Transparency, Accountability and Sustainability project, which was launched in 2018.

The SFTAS project was designed to strengthen transparency and accountability at the subnational level and will end this year.

A total of $1.5 billion has been committed to the project in two tranches of $750 million (December 2018 and December 2020) by the World Bank.

Although the money is a grant to state governments, it is a loan to the federal government.

Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, had earlier this month disclosed that states had received 471.9 billion naira from the $1.5 billion funded SFTAS program. by the World Bank for the results.

The report obtained by our correspondent revealed that the implementation of the current SABER program and institutional arrangements would also rely on the SFTAS project.

When announcing the program in August, Vice President Yemi Osinbajo said the kind of business environment Nigeria required for meaningful economic growth could only be achieved through hard work at the sub-national level.

He said: “For anyone with state-level responsibilities, you have your work cut out for you.

“If we’re going to have the kind of business environment our country deserves that can make a difference to our economy, it’s hard work at the sub-national level that would really move the needle.”