Nigeria is in the process of accessing a $750 million World Bank loan to enable local states to support vulnerable households and mitigate the effects of the COVID-19 pandemic on the economy, the finance ministry said on Friday.
Africa’s most populous country and the continent’s biggest oil producer, is tilting towards recession after the pandemic triggered a collapse in global oil prices, Nigeria’s main export.
The World Bank said in June that the pandemic could push 5 million people in Nigeria into poverty amid the worst economic hardship in the African powerhouse since the 1980s.
“Nigeria … cannot afford to remain in recession. The survival of over 200 million population is germane to all we do,” the statement quoted the Finance Minister Zainab Ahmed as saying.
“The consequences will be too high if we ignore the root cause of rising civil unrest in our country.”
Last month, in demonstrations which turned violent, Nigerians protested against police brutality. Some blamed the hardship brought on by the pandemic as a trigger for the unrest.
The finance ministry said the government responded appropriately to the challenges posed by the pandemic and identified measures to enhance oil and non-oil revenues and reduce non-essential spending.
The West African country has said it will spend 3% of its GDP to stimulate its economy this year, similar to most sub-Saharan African countries but far less than the G20 countries.
Nigeria is also in discussions with the World Bank for a budget support loan of $1.5 billion whose approval has been delayed due to concerns over desired reforms.