The World Bank has approved two financial operations for Nigeria, totaling $2.25 billion. The initiatives include the $1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing Program (DPF) and the $750 million Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR). These funds aim to support Nigeria's efforts to stabilize its economy and provide assistance to vulnerable populations.
Nigeria is currently facing a fragile economic situation and has initiated critical reforms to address economic distortions and improve its fiscal outlook. Measures taken include unifying multiple official exchange rates, adjusting gasoline prices to phase out subsidies, and refocusing the Central Bank of Nigeria's mandate on price stability by tightening monetary policy and increasing interest rates. Additionally, a targeted cash transfer program is being implemented to help poor households cope with high inflation.
"We have embarked on bold and necessary reforms to restore macroeconomic stability and put the country back on a sustainable and inclusive economic growth path that will create quality jobs and economic opportunities for all Nigerians," said Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy. "We welcome the support of the RESET and ARMOR programs as we further consolidate and implement our macro-fiscal and social protection policy reforms."
Ousmane Diagana, World Bank Vice President for Western and Central Africa, commented on Nigeria's reform efforts: "Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty. It is critical to sustain the reform momentum."
The RESET DPF aims to strengthen Nigeria's economic policy framework by creating fiscal space while protecting vulnerable populations. The ARMOR PforR focuses on implementing tax reforms, strengthening tax revenue administrations, and safeguarding oil revenues.
The International Development Association (IDA), part of the World Bank, supports these initiatives through grants and low-interest loans aimed at boosting economic growth in some of the world's poorest countries.