African Development Bank Board of Directors has explained why it approved a $288.5 million loan to help Nigeria tackle the novel Coronavirus (COVID-19) pandemic and mitigate its impact on people and businesses.
The bank said the loan would bolster the government’s plans to improve surveillance and response to COVID-19 emergencies, ease the impact on workers and businesses and strengthen the social protection system.
The loan was also described as the bank’s initial response to help mitigate the slump in oil prices and its impact on the national economy.
“The proposed programme will ensure that the fiscal position and the economy are sufficiently supported to weather the COVID-19 shocks, thereby limiting its potential adverse impact on livelihoods and the economy more generally,” said Senior Director of the African Development Bank for Nigeria, Ebrima Faal.
Faal said beyond the country’s immediate economic recovery needs, the bank and other development partners, would dialogue with the government on proposals for medium-term structural reforms to diversify and boost domestic revenues away from the oil sector.
He said the bank has instituted strong fiduciary measures to monitor the use of COVID-19 funds, and would maintain dialogue, particularly with the Office of the Auditor General in Nigeria, to ensure adherence to the transparency and accountability of the funds.
Nigeria, Africa’s most populous nation and the continent’s largest oil producer, is facing twin crises – a health epidemic caused by COVID-19, and an economic crunch largely occasioned by a global oil price plunge. As of June 6, the country reported 12,233 Coronavirus cases, 3,826 recoveries and 342 deaths.
About 40.1 per cent of Nigerians live below the poverty line of $1.90 per day and it’s feared that the fall in household income during the pandemic would result in wealth deterioration for both the formal and informal sector workers.
Prior to the COVID-19 outbreak, Nigeria’s economy was projected to grow by 2.9 per cent of GDP in 2020 and further expand by 3.3 per cent in 2021. But with the advent of the pandemic and the slump in crude prices, the economy is expected to shrink by between 4.4 per cent under a conservative baseline scenario, and 7.2 per cent should the pandemic persist to end-2020.
The bank’s intervention aligns with its COVID-19 Response Facility (CRF); Ten-Year Strategy (2013-2022); and High 5 priorities, especially “Improve the quality of life for the people of Africa.” It’s also consistent with the second strategic pillar of the recently approved bank’s Country Strategy Paper 2020-2024 for Nigeria.
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