Nigeria’s President Bola Tinubu has requested the Senate’s approval for an $800 million loan from the World Bank. The loan is intended to fund a social program that aims to alleviate the impact of high fuel prices following the removal of a costly petrol subsidy. The government of former President Muhammadu Buhari had previously approved the loan to support the National Social Safety Net program.
In a letter to lawmakers, Tinubu explained that the purpose of the loan is to expand the coverage of shock-responsive safety net support among poor and vulnerable Nigerians. Under the program, 12 million poor households will receive 8,000 naira ($10.32) for six months, benefiting approximately 60 million individuals.
In addition to the loan, Nigerian authorities plan to raise the minimum wage. Details of the wage increase are expected to be finalized next month after concluding talks with the main labor unions. These measures are part of Tinubu’s ambitious reforms to address issues such as the high debt burden. One of the key reforms was the removal of the fuel subsidy upon taking office in May.
The fuel subsidy, which had kept prices low for decades, had become increasingly expensive, with the government spending $10 billion on it last year. This led to wider budget deficits and an increase in government debt.
To mitigate the effects of the fuel subsidy removal, Tinubu requested an amendment to the 2022 supplementary budget. The House of Representatives approved this request, allowing the government to allocate 500 billion naira to cushion the impact of the subsidy removal. This reallocation will redirect funds previously designated for other projects.
($1 = 775.0000 naira)
Reporting by Camillus Eboh
Writing by Elisha Bala-Gbogbo
Editing by Frances Kerry
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