Comfort Ekeleme
22 November 2009
Towards supporting the efforts of governments in cushioning the effects of the global crisis, World Bank has said it is preparing a development policy operation of $500 million (N75.5 billion) for approval in early 2010 to support the Federal Government's response to the global financial crisis.
World Bank country Director, Professor Foluso Okunmaduwa, who disclosed this at the the launch of a joint country partnership strategy (CPS) for Nigeria by the World Bank's Department for International Development (DFID), United States Agency for International Development (USAID) and the African Development Bank (AfDB), said the proposed credit is intended to provide budgetary support to the Federal Government to offset the fiscal impact of the crisis and help the government in maintaining its current economic reform path in the financial sector; fiscal policy and management; and governance.
Also, the International Finance Corporation (IFC), the private arm of the World Bank, is undertaking initiatives including examination of the capital requirements of selected banks and potential equity investments by the Bank Capitalization Fund, part of the IFC.
The International Development Association (IDA) on its own is providing a financial support of $4.5 billion over the period of 2010 to 2013. DFID is proposing to increase its support in 2010 to 2011 to 120 million and 140 million pounds per year; AfDB has a loan of UA80 million in its lending programme while USAID has yet to define its financial envelope.
The CPS which covers years 2010-2013 focuses on three themes to transform and diversify Nigeria's economy. The CPS aims at improving governance, maintaining non-oil growth and promoting human development identified by the government and re-affirmed in the stakeholder consultations.
The partnership assistance at the federal level will be across three pillars of improving governance, maintaining non-oil growth and promoting human development.
In governance, the partnership will continue to support on-going initiatives to strengthen procurement, public financial management, civil service reform and statistical capacity building.
Under non-oil economic growth, the partnership will engage in policy dialogue and projects such as DFID's and the World Bank's Joint Growth and Employment in States (GEMS) project and USAID projects including markets and trade capacity development.
In human development, the partnership will focus on the social safety net agenda; both to respond to global crisis and improve targeted programmes such as the conditional cash transfer programme and youth empowerment and employment programme.
The Country Partnership Support (CPS), according to the donor partners, has become imperative so that Nigeria could sustain its ambitious agenda of reforms which it started in 2003.
The most far-reaching of these reforms, according to the international financial agencies, is to base the budget on a conservative reference price for oil, with excesses saved in a special account. Other significant reforms were launched in public finance, banking, oil and gas, power, telecommunications, ports, steel and mining.
The economy responded with strong growth between 2003 and 2007, but slowed in 2008, in the wake of the global economic crisis.
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