The World Bank has initiated the disbursement of $300 million out of the approved $800 million for the National Social Safety Net Program-Scale Up.
The documents from the World Bank confirm the recent disbursement of about $299.99 million to Nigeria under the National Social Safety Net Programme-Scale Up, approved on December 16, 2021.
With approximately 37.5% of the total loan disbursed, there remains a pending balance of about $442.88 million.
The $800 million social safety net program involves a conditional cash transfer planned to be executed by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation. This loan aims to support a monthly cash transfer program for poor and vulnerable Nigerians impacted by recent policies, including the removal of fuel subsidies.
In October 2023, President Bola Tinubu officially launched the conditional cash transfer program, targeting 15 million households nationwide to receive N75,000 within three months.
The Federal Government is also seeking the services of a consulting firm to upgrade the system for the cash transfer program, as stated in the document. The upgrade is deemed necessary due to credibility concerns with the social register from the previous administration.
The financing agreement between the Federal Republic of Nigeria and the International Development Association of the World Bank outlines the repayment plan, with the first payment due on January 15, 2027, and the last payment due on July 15, 2051.
The $800 million loan carries a maximum commitment charge rate of one-half of one per cent per annum on the Unwithdrawn Financing Balance, a service charge of three-fourths of one per cent per annum on the withdrawn credit balance, and an interest charge of one and a quarter per cent per annum on the withdrawn credit balance.
Additionally, a percentage of the principal amount of the loan is expected, increasing over time from 1.65% for the first payment to 3.40% for the last payment.
