New Loan for Cash Transfer
The Federal Government is reportedly in the process of securing a fresh loan of $400 million from the World Bank.
This substantial loan is intended to fund a conditional cash transfer program designed to benefit 15 million households across Nigeria.
President Tinubu’s Announcements
This financial endeavor comes on the heels of President Bola Tinubu’s nationwide address on Nigeria’s Independence Day, where he unveiled several measures to alleviate the economic impacts of petrol subsidy removal.
Among these measures was the conditional cash transfer program, set to provide financial support to 15 million households for a three-month period from October to December 2023.
Provisional Allowance for Federal Workers
In the same address, President Tinubu also announced the approval of a provisional allowance of N35,000 for junior federal workers over the course of the next six months.
This decision was the result of negotiations with labor unions and key stakeholders within the business community.
The aim was to raise the federal minimum wage without causing undue inflation.
Building on Past Initiatives
It’s worth noting that the Muhammadu Buhari administration had previously secured an $800 million loan from the World Bank.
This loan was acquired to provide post-petroleum subsidy palliatives for over 50 million Nigerians.
The $400 million loan, along with the $800 million secured earlier, brings the total amount that the Federal Government is borrowing from the World Bank for cash transfer initiatives to $1.2 billion.
Source of Funding for Wage Increase
A high-ranking government official, speaking on the condition of anonymity, explained that the N35,000 cash award to federal civil servants will be funded directly by the government.
In contrast, the cash transfer initiative, involving N25,000 payments for three months to 15 million households, will be covered by the World Bank loan.
To facilitate this initiative, the government will secure $400 million in addition to the $800 million obtained in the past.
Avenues for Implementation
To finance the N35,000 cash award to civil servants, the government plans to send a supplementary appropriation bill to the National Assembly.
This approach ensures that the funding for the civil servants’ allowance is compliant with legal regulations, preventing any unauthorized spending from the government budget.
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