In an exclusive interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland, Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, revealed ongoing discussions with the World Bank for a loan of $1.5 billion.
The funds are earmarked to provide essential support for the national budget and inject liquidity into the foreign exchange market.
Edun expressed optimism about securing the financial assistance, citing the country’s commitment to ongoing reforms, including the elimination of fuel subsidies and adjustments to the exchange-rate policy since President Bola Tinubu assumed office in May. These reforms have garnered international investor approval but contributed to a spike in living costs, with inflation reaching a 27-year high of 28.9%, and the naira depreciating by approximately 50% against the dollar.
Despite these challenges, Edun emphasized Nigeria’s eligibility for Eurobond market access, with potential plans to tap into it later in the year if interest rates decline sufficiently. The Finance Minister also disclosed efforts to address a $5 billion backlog in demand for dollars, driven by the scarcity of foreign exchange in the domestic market.
To counter this, the government aims to increase oil production to 1.78 million barrels per day, up from 1.49 million barrels, anticipating a boost to the economy and government revenue. Plans for domestic refining at state-owned facilities in Port Harcourt and the Dangote refinery in Lagos are in place, aiming to reduce gasoline imports and alleviate currency pressures.
Edun underscored the government’s priority of stabilizing the naira, outlining strategies such as leveraging oil revenue, tapping into domestic dollar savings, and encouraging formal and informal market participation. Overall, the Finance Minister remains confident that these measures will contribute to Nigeria’s economic recovery and currency stability.
