The African Development Bank has approved 288.5 million dollars loan to help Nigeria tackle the COVID-19 pandemic and mitigate its impact on the economy.
The bank’s Communications and External Relations Department made this known in a statement on Saturday.
It explained that the loan would bolster the government’s plans to improve surveillance and response to COVID-19 emergencies, ease the impact on workers and businesses, as well as strengthen the social protection system.
The bank said Nigeria, Africa’s most populous nation and the continent’s largest oil producer, was facing twin crises of a health epidemic caused by COVID-19, and an economic crunch largely occasioned by a global oil price plunge.
The bank added that the loan was the Bank’s initial response to help mitigate the slump in oil prices and its impact on the national economy.
A Senior Director of the Bank, Mr Ebrima Faal explained that it was feared that the fall in household income during the pandemic would 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.
“Prior to the COVID-19 outbreak, Nigeria’s economy was projected to grow by 2.9 per cent of 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 to end-2020.
“Beyond the country’s immediate economic recovery needs, the Bank and other development partners will dialogue with the government on proposals for medium-term structural reforms to diversify and boost domestic revenues away from the oil sector,” he added.
The Bank said it had 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 transparency and accountability.