Contrary to the expectation of the outgoing administration of President Muhammadu Buhari, the $800 million facility from the World Bank to cushion the effect of the removal of oil subsidy is likely to be disbursed to the incoming Nigerian government from August this year.
The loan is sourced by the outgoing administration to alleviate the sufferings that the removal of the oil subsidy will cause Nigerians. The Buhari administration last year announced that Nigeria would exit the oil subsidy regime in June 2023 following the provision of the 2023 Fiscal Framework and Appropriation Act as well as the Petroleum Industry Act (PIA).
It thereafter set up a committee comprising the Ministry of Finance, Budget and National Planning, Ministry of Petroleum Resources, Nigerian National Petroleum Company (NNPC) Limited, the downstream and upstream regulators, Central Bank of Nigeria (CBN), and the Chief Economic Adviser to the President to work out a road map for the removal of the subsidy.
The outgoing administration of President Muhammadu Buhari which announced the facility, had expected World Bank to disburse the loan before it leaves office on 29th May so it can expend the facility. Sources familiar with the workings of the multilateral institution however said that the process for the disbursement will start by July, two months after the Buhari administration must have left office, and it will last a month.
“The paperwork on the loan has been finalised but there are some procedures which still had to be undergone before the final disbursement”, stated a source who is familiar with the issue. This, unfortunately, will push the closure beyond President Muhammadu Buhari’s administration whose tenure ends May 29”.