States to get $750m W’Bank loan in December
States in Nigeria are to get the first tranche of a $750m World Bank loan by December 2022.
In the final report for State Action on Business Enabling Reforms, which is available on the World Bank’s website, it was disclosed that about $0.5m to $4m would be released to Nigerian states based on certain criteria.
The fresh loan is from a Program for Results instrument under the State Action on Business Enabling Reforms.
According to the World Bank, the programme would run from 2023 to 2025. It will be built on the Presidential Enabling Business Environment Council.
The programme aims to improve the efficiency of land administration, the regulatory framework for private investment in fiber optic infrastructure, services provided by investment promotion agencies and public-private partnership units. It is also targeted at achieving efficiency and transparency of government-to-business services in participating states.
The report read in part, “This proposed $750m lending operation will last from 2023-2025 and consists of: (1) a $730m performance-based financing component for state governments, which will be implemented as a Program-for-Results; and (2) a $20m Technical Assistance component which will be implemented as Investment Project Financing to support implementation and capacity building.”
The disbursement will be in line with certain disbursement-linked indicators, which means the states are meant to achieve certain criteria to be qualified for each disbursement under this programme.
The report noted, “Achievement of each prior result will result in indicative disbursement of an allocation of $0.5m to $4m (for select stretch targets).”
Major conditions are improved efficiency in property registration and sustainability of the land-based investment process support in a state.
This programme is similar to the State Fiscal Transparency, Accountability and Sustainability project, which was initiated in 2018.
The SFTAS project was designed to strengthen transparency and accountability at the sub-national level, and will end this year.
A total of $1.5bn was committed to the project in two batches of $750m (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.
The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, had, earlier this month, disclosed that states had received N471.9bn of the $1.5bn World Bank-assisted SFTAS Programme for Results.
The report obtained by our correspondent revealed that the current SABER programme’s implementation and institutional arrangements would also build on the SFTAS project.
When announcing the programme in August, Vice President, Yemi Osinbajo, had said that the kind of business environment Nigeria required for significant economic growth could only be achieved through hard work at the sub-national level.
He said, “For all who are charged with responsibilities at the state level, you have your work cut out for you.
“If we are going to have the kind of business environment that our country deserves and that can make a difference for our economy, it is the hard work at the sub-national level that would really move the needle.”
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