The Board of Directors, African Development Bank (AfDB), on Friday, approved a $288.5 million loan to help Nigeria tackle the COVID-19 pandemic and mitigate its impact on people and businesses.
In the latest report released by the National Bureau of Statistics (NBS), 79 per cent of the households in the country have been thrown into poverty, just as 42 per cent of the citizens have lost their jobs since the outbreak of the virus.
The loan, according to the development finance institution, will bolster 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.
As of June 5, the country reported 11,516 coronavirus cases, 3,535 recoveries and 323 deaths.
The loan is the Bank’s initial response to help mitigate the slump in oil prices and its impact on the national economy.
About 40.1 per cent of Nigerians live below the poverty line of $1.90 per day and it is feared that the fall in household income during the pandemic will result in wealth deterioration for both the formal and informal sector workers.
“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,” Ebrima Faal, Senior Director of AfDB for Nigeria, said.
Prior to the COVID-19 outbreak, Nigeria’s economy was projected to grow by 2.9 per cent of Gross Domestic Products (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 till the end of 2020.
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 explained that the Bank has instituted strong fiduciary measures to monitor the use of COVID-19 funds, and will maintain dialogue, particularly with the Office of the Auditor General in Nigeria, to ensure adherence to the transparency and accountability of the funds.
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 is also consistent with the second strategic pillar of the recently approved Bank’s Country Strategy Paper 2020-2024 for Nigeria.