The federal executive council (FEC), according to Wale Edun, minister of finance and coordinating minister of the economy, has accepted a loan request for $1.58 billion.
According to Edun, the loan proposal is divided into two parts: a $1.5 billion World Bank loan and a $80 million African Development Bank (AfDB) credit.
After the FEC meeting on Monday at the presidential villa in Abuja, the minister announced the approval.
He informed the state house reporters that the Bretton Woods institution’s International Development Association (IDA), which offers low-income countries free or zero-interest loans, will be used to apply the $1.5 billion from the World Bank.
“Today, we also approved the World Bank’s financial request. And in particular, the International Development Association, which functions as the World Bank’s arm for lending or funding at essentially no cost or at all.
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There is a $1.5 billion total. And the background is exactly what the Minister of Planning and Budget told you.
According to Edun, the loan comes at a time when borrowing costs are increasing as industrialized countries raise interest rates and impose capital controls to combat inflation.
“What that means is that interest rates for everybody else, become not just high but very painful, if not on (sic) affordable within that context,” he explained.
Edun claimed that President Bola Tinubu’s strict policies have made the World Bank keen to lend to Nigeria.
He said that the World Bank is prepared to “process on our behalf $1.5 billion of concessional financing, relatively cheap financing, and financing that will be dispersed relatively quickly” because the multilateral development bank has supported the difficult decisions.
Edun stated that the Ekiti Knowledge Zone (EKZ) project will be financed with the $80 million loan from the AfDB.
He claimed that as the technology sector’s contribution to the economy grows, the project was developed to give young people in Ekiti technical capabilities.
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