The World Bank Group has approved a $1.5 billion package to help build a resilient recovery post-COVID-19 for state-level intervention in Nigeria.
In addition, the multilateral institution discussed a new five-year Country Partnership Framework (CPF) from 2021 to 2024 for Nigeria.
The $1.5 billion was part of a $3 billion loan request the federal government had been pushing for.
A statement from the bank yesterday reiterated that Nigeria was at a critical juncture, adding that with the sharp fall in oil prices as a result of COVID-19, the economy was projected to contract by over four per cent in 2020.
This, it anticipated, would plunge the country into its deepest recession since the 1980s.
It projected that government revenues could fall by more than $15 billion this year, and the crisis could push an additional five million Nigerians into poverty in 2020.
It explained that the $1.5 billion was for two projects, which included Nigeria's COVID-19 Action Recovery and Economic Stimulus - Programme for Results (Nigeria CARES).
"This programme will help increase access to social transfers and basic services, as well as provide grants to poor and vulnerable households. It will also strengthen food supply chains for poor households while facilitating recovery and enhancing capabilities of MSMEs. This is financed through an International Development Association (IDA) credit of $750 million," it explained.
The other project was for the State Fiscal Transparency, Accountability and Sustainability Program for Results (SFTAS) Additional Financing.
"Building on the progress made across 36 states, the original SFTAS programme will be expanded and scaled up in response to COVID-19. The additional financing will help meet the financing gap in the Programme Expenditure Framework, due to the sharp reduction in government revenues associated with the crisis.
"It will help increase the efficiency in spending, strengthen revenue mobilisation, and enhance accountability and transparency in public resource management to further strengthen state-level COVID-19 response. The project is financed through an International Development Association (IDA) credit of $750 million," it added.
The World Bank Country Director for Nigeria, Shubham Chaudhuri, explained that the CPF would guide the bank's engagement with Nigeria for the next five years in supporting the government's strategic priorities by taking a phased and adaptive approach.
"To realise its long-term potential, the country has to make tangible progress on key challenges and pursue some bold reforms. Our engagement will focus on supporting Nigeria's efforts to reduce poverty and promote sustained private sector-led growth," he added.
Prepared jointly with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the CPF proposes a collaborative approach of how resources across the entire Bank Group can best support the government's effort to achieve its goal to lift 100 million citizens out of poverty.
Shedding more light on the CPF, the Washington-based institution explained that it would focus on four areas. These are investing in human capital by increasing access to basic education, quality water and sanitation services; improving primary healthcare, and increasing the coverage and effectiveness of social assistance programmes.
"Additional investments in promoting women's empowerment and youth employment and skills, especially for young women, will also, help reduce maternal and child mortality. Promoting jobs and economic transformation and diversification by supporting measures to unlock private investment and job creation and increasing access to reliable and sustainable power for households and firms.
"The CPF will also focus on boosting digital infrastructure and developing economic corridors and smart cities, to provide Nigerians with improved livelihoods. Enhancing resilience by strengthening service delivery and livelihood opportunities in the North-east and other regions grappling with insecurity, as well as modernising agriculture and building climate resilience," it stated.
The CPF will focus on strengthening the foundations of the public sector by improving public financial management and strengthening the social contract between citizens and government through improved fiscal and debt management.
"A strong private sector is critical to support Nigeria's economic growth and development. The Country Partnership Framework leverages the World Bank Group to enable business growth that is inclusive and sustainable," IFC's Director for Southern Africa and Nigeria, Kevin Njiraini said.
He added: "IFC will continue to support a broader private sector-led growth strategy to help Nigeria realise its immense potential by attracting more investment and creating millions of quality jobs for its growing population."
Also, Director at MIGA for Economics and Sustainability, Merli Baroudi, said: "To achieve sustainable post-COVID-19 economic recovery, the country needs to strengthen reforms that support private sector solutions and crowd in private sector finance.
"In close coordination with the World Bank and IFC, MIGA will continue to expand its support for cross-border private investment into Nigeria.
"The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response.
"It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector to continue to operate and sustain jobs.
"The World Bank Group is making available up to $160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and $12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines."