The World Bank has given Nigeria a $1.5 billion loan as part of the RESET Development Policy Financing program, which aims to support economic reforms. The loan was approved in June 2024 and was quickly provided after Nigeria made important changes, including fuel subsidy removal and tax policy changes.
The loan is split into two parts: $750 million from the International Development Association (IDA) in July 2024 and another $750 million from the International Bank for Reconstruction and Development (IBRD) in November 2024. These funds will help Nigeria stabilize its economy and work towards long-term growth and change.
The main changes for the loan involved removing controls on fuel prices, letting them match global market prices, and introducing the Nigeria Tax Bill 2024, which proposes increasing VAT to 10% by 2025. The World Bank commended Nigeria for doing better than expected in fully removing controls on the fuel market.
Even though the evaluation was positive, cutting subsidies has caused protests because living expenses have gone up. In response, the government launched a N25,000 monthly cash transfer program for 15 million vulnerable households, though only four million have received it. The government is also encouraging the use of compressed natural gas (CNG) as a more affordable fuel option.
This loan is part of a larger $6.95 billion aid package from the World Bank to Nigeria, led by President Bola Tinubu. In 2025, the World Bank plans to approve three additional loans worth $1.65 billion. These loans will focus on solving problems related to displaced people, education, and food security.
