Nigeria Secures $2.25bn World Bank Loan, Plans Diaspora Bond

The Minister of finance, Wale Edun said the federal government has qualified for processing a 40-year term loan with a 10-year moratorium, which he described as ‘virtually a grant’ of $2.25 billion from the World Bank at one percent interest rate. This is as he said the government is considering issuing a diaspora bond.

Speaking at a joint press conference of the ministry of finance and the Central Bank of Nigeria (CBN) at the spring meetings of the International Monetary Fund (IMF) and the World Bank, in Washington D.C, Edun said the country is also set to benefit from budgetary support and low-interest funding from the African Development Bank.

He added that negotiations with foreign direct investors are also underway with promising prospects for substantial investment flows into the country. “If you look at the fact that we have qualified for the processing, just this week to the Board of Directors of the World Bank, of the total package of $2.25 billion of what you can call, I mean, if there is no such thing as a free lunch, but it is the closest you can get to free money. It is virtually a grant. It is for about 40 years, 10 years moratorium and about one per cent interest. So that also is part of the flow you can count.”

On debt sustainability, Edun emphasised the critical importance of generating revenue, particularly from oil, as a primary source, with endeavours focused on maximising its benefits for Nigerians. He pointed out that President Bola Tinubu has established ambitious goals to increase oil production, targeting a rise to two million barrels per day from the current 1.6 million.

Noting that Nigerians abroad are “doing very, very well. They have significant funding,” Edun said the Nigerian government is considering the issuance of diaspora bonds, aiming to attract funds from Nigerians living abroad and foreign currency holdings. The proposed diaspora bonds are anticipated to serve as an attractive investment instrument, catering to the financial interests of both Nigerians abroad and foreign investors.

“The government is looking at attracting those funds and capturing those funds through a diaspora type of instrument, a diaspora bond. We think that would be a very attractive instrument for Nigerians abroad and for foreign holdings of foreign currency and we look to have a substantive, substantial and successful issue later in the year,” Edun disclosed.

On his part, the governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, said, “Besides our meetings with multilateral financial institutions, and foreign investor groups with a keen interest on developments in Nigeria, including a critical gathering at the US Chamber of Commerce, we had very productive discussions with leading International Money Transfer Operators (IMTOs), where we collectively committed to doubling remittance flows through formal channels into Nigeria in the immediate short to medium term.

This target is both ambitious and achievable, and we’re wasting no time in setting up a collaborative task force, reporting to myself, to drive progress and address any bottlenecks that hinder flows through formal channels.”