Nigeria has requested an 18-month extension on the closing date of the World Bank’s $800 million palliative loan in a calculated decision to strengthen its social safety net programs in the face of growing inflation and economic challenges.
The World Bank’s restructuring paper document on the project states that the Nigerian government has asked to move the project’s June 30, 2024, closing date to December 31, 2025, according to Nairametrics.
The goal of the extension is to improve the effectiveness of the National Social Safety Net Program-Scale Up (NASSP-SU) and realign project timelines.
The document read: “This paper seeks approval from the Country Director for a Level II restructuring of the National Social Safety Net Program Scale-Up project (NASSP-SU, P176935, Credit No. 7019-NG), an US$800 million Investment Project Financing (IPF). The restructuring will extend the project closing date by 18 months from June 30, 2024, to December 31, 2025. The benefit size and duration of the cash transfers under component 1 will also be changed.
“Finally, the chairmanship of the project’s national steering committee will be changed from the Minister of Humanitarian Affairs and Poverty Alleviation to the Minister of Finance. This is the first restructuring and extension of the project’s closing date.”
The reason for the request for an extension is Nigeria’s continuous struggle with high inflation, which peaked in early 2024 at 33.2% and was made worse by the removal of fuel subsidies and depreciating exchange rates.
Many households have been pushed below the poverty line as a result of the government’s economic reforms which include surging inflation, volatile foreign exchange, and the fuel subsidy removal.
In a letter dated March 4, 2024, the Federal Ministry of Finance formally requested the extension to ensure comprehensive implementation of project activities.
The purpose of the sought extension is to fortify the social safety net delivery systems and give more time for implementing and overseeing financial transfers.
The NASSP-SU project was approved on December 16, 2021, and went into effect on January 30, 2023. It was started to give Nigeria’s poor and vulnerable shock-responsive safety net support.
However, a government review forced a brief delay in the project’s execution from January to March 2024.
The project has advanced significantly, despite owing to legislative obstacles
