Nigerian States To Benefit From World Bank’s $750m Credit Facilities

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World Bank Group President Jim Yong Kim makes remarks at the Plenary Session of the IMF and World Bank's 2017 Annual Fall Meetings, in Washington, U.S., October 13, 2017. REUTERS/Mike Theiler - RC1820C71280

The World Bank has approved a $750 million International Development Association (IDA) credit to support the Nigeria State Action on Business Enabling Reforms (SABER) Program-for-Results.

The Washington-based institution disclosed this in a statement on Thursday.

According to the Bretton Wood institution, the $750 million IDA credit will help Nigeria accelerate the implementation of critical actions that will improve the business-enabling environment in states.

“Nigeria has made progress in advancing reforms to eliminate constraints in the business environment, especially through actions driven by the Presidential Enabling Business Environment Council (PEBEC),” the statement reads.

“However, Nigeria’s ability to attract domestic and foreign investment remains low compared to its peers. Nigeria’s 36 states and the Federal Capital Territory (FCT) are capable of catalysing private investment but vary significantly in their efforts and ability to do so.

Nigerian States To Benefit From World Bank’s $750m Credit Facilities

“Given the importance of state-level reforms, the government developed a new program—SABER—to accelerate the implementation of critical actions that improve the business-enabling environment in Nigeria’s states. The government’s SABER program builds on the successes of PEBEC.

“It aims to strengthen the existing PEBEC-national economic council subnational interventions by adding incentives, namely results-based financing to the states and the delivery of wholesale technical assistance–available to all states–to support gaps in reform implementation.

“The program is open to all states in Nigeria and FCT, given their ability to take concrete steps towards addressing major business-enabling environment challenges around land administration, the regulatory framework for private investment in fibre optic infrastructure, public-private partnerships (PPP) and investment promotion frameworks and services, and business enabling regulatory environment.”

Shubham Chaudhuri, World Bank country director for Nigeria, said the aim is to support private sectors to increase revenues.

“Following the significant progress made by states on fiscal reforms through the State Fiscal Transparency, Accountability and Sustainability (SFTAS) program, the SABER program endeavours to offer similar support to the states to undertake critical business-enabling policy and institutional actions that will incentivise private sector development,” he said.

“Private sector investments remain the major vehicle to create more jobs, increase state’s revenues and improve social and economic outcomes for citizens.”

On her part, Bertine Kamphuis, task team leader, SABER, said the programme is to strengthen states to achieve results-based projects.

“Overall, the SABER program looks to consolidate and deepen business enabling environment reforms across more states,” she said.

“The use of the Program-for-Results model, which ensures disbursement of funds after achieving results, helps the government in strengthening its own program by incentivising institutional performance at the state level through results-based financing.

States will be responsible for achieving the program results and thus will be leading the implementation of the program.”

The bank also said the programme is in line with Nigeria’s National Development Plan (NDP), which sets an ambitious strategy to pursue sustained private sector-led economic growth, generating 21 million full-time jobs and lifting 35 million people out of poverty by 2025.