FG to Pay $23.3 Million For Consultancy Fee on $800 Million World Bank Loan For Subsidy Relief, CBN Reacts

• The Nigerian government will spend over $23 million on consultancy fees from the $800 million loan from the World Bank
• The loan guarantees social safety for vulnerable Nigerians as it prepares for petrol subsidy removal
• Part of the consultancy fee would be spent on sundry things like goods, works, among others

According to the federal Ministry of Finance, Budget and National Planning, the Nigerian government will spend about $53 million hiring consultancy firms out of the $800 million loan secured from the World Bank to cushion the effect of petrol subsidy removal on Nigerians.

Per the financing agreement document between the Nigerian government and the International Development Association of the World Bank, the incoming administration will begin repaying the $800 million loan approved by the World Bank as a subsidy palliative.

The fund is meant to provide a soft landing for Nigerians

Read also

GTBank parent company records over N214bn profit in 2022, but government tax cut it down by 23.45 percent

An analysis of the fund indicates that Nigeria is expected to spend $23.3 million on consultancy charges for the project to extend the coverage of shock-responsive safety net support among the poor and vulnerable Nigerians and strengthen the country’s national safety net delivery system until June 2024.

A breakdown of the $23.3 million consultancy fee indicates expenses of $10.74 million for goods, works, non-consulting services, and operating costs for the scheme.

Also, the Social Safety Nets Coordinating Office and other projects will benefit from the $23.3 million. In comparison, $12.58 million will go for goods, works, non-consulting services, and operating costs for the National Cash Transfer Office.

Consultants better suited to handle the job

ChapelHill Denham, a leading independent investment management, banking, and securities trading firm, said that it is essential to engage the services of an independent consulting firm for the scheme as national bodies such as the Ministry of Finance are not trained to perform the duties of a consultant.

Read also

Access, First Bank, UBA and other commercial banks search for cash, borrow billions from CBN

Findings show that the loan is concessional financing, meaning below-the-market-rate finance provided by major financial institutions, such as development banks and multilateral funds, to developing countries for developmental purposes.

BusinessDay reports that the loan attracts a maximum commitment charge rate of one and a half per cent per annum on the Unwithdrawn Financing Balance and a service charge of three-fourths of one per cent per annum on the withdrawn credit balance.

CBN asks FG to use eNaira to transfer N368.8 billion to Nigerians

Meanwhile, Legit.ng earlier reported that the Central Bank of Nigeria had pitched the eNaira to the federal government as the best alternative for sharing $800 million, about N368.8 billion, in its National Social Safety Net Programme Scale Up.

The pitch by the CBN is an effort to drive and strengthen its cashless policy.

The pitch was contained in CBN’s National Fintech Strategy document.

Source: Legit.ng