Nigeria Content Online

The
World Bank said its support to Nigeria in the wake of the global
financial crisis has enabled the country to survive the turbulence of
the period.

In a statement on
the bank’s website, the international financial institution affirms
that its support to Nigeria’s ongoing economic reforms has helped to
reduce the negative effects of the crisis.

The World Bank
claimed the support, under the aegis of International Development
Association (IDA), has helped Nigeria address key financial
transparency issues that would buffer the country from future shock.
The IDA, formed in 1960, is part of the World Bank that helps the
world’s poorest countries.

“By providing the
first budget support to Nigeria in 30 years, the International
Development Association was able to help the government arrest the
slide in market confidence,” the report added.

The IDA operation
provides budgetary support to the Nigerian government to offset the
fiscal impact of the after effects of the global financial crisis. It
also supports the government in maintaining its current economic reform
path in the financial sector, fiscal policy, management, and governance.

Monetary support

“A $500 million
development policy credit from IDA helped provide fiscal space at a
time when government’s budget shortfall and borrowing requirement
increased dramatically, primarily as a result of the global financial
crisis and the concomitant fall in oil prices,” said the IDA statement.

It added that the
IDA credit potentially prevented a broader collapse of the banking
system in Nigeria. The Central Bank of Nigeria (CBN) last year injected
N620 billion into eight banks in the wake of the global financial
crisis to save the financial institutions from imminent collapse.

Ismail Radwan, a
senior economist with the World Bank, said the amount of credit needed
to take Nigeria into the top 20 economies by the year 2020 would have
to be generated internally.

Mr. Radwan based
his optimism on the five pillars of ongoing reforms in the financial
sector. These are improvement in banking supervision; improved credit
information; conventional banks diversifying by introducing new
products; credit guarantee schemes; and business development services
to scale up business training for entrepreneurs.

He said the World
Bank was convinced that the intervention by the Central Bank in the
banking sector last year was necessary in order to save an already bad
situation and to create a platform for banks to be willing to lend to
the real sector.

“Nigeria is a land
of tremendous opportunities. We have all sort of people wanting to come
to Nigeria to make money, and yet Nigerian banks don’t seem to see all
the opportunities in this country,” Mr. Ridwan said.

World Bank on Nigeria

Minister of
finance, Olusegun Aganga, said recently that the World Bank’s
impression about Nigeria’s economic development was commendable. Mr.
Aganga said based on the findings of the Bretton Woods institution,
Nigeria was making good progress compared to other emerging economies.

“The World Bank
gave an independent assessment about where we are, whether we are on
the right track or not, and where the economy is today. We find some
things very interesting in their presentation,” he said.

He added that government was prepared to partner with the private sector in order to drive economic growth.

The IDA said from
its intervention in Nigeria, it was able to identify a set of medium
term actions required to achieve regulatory reform in banking,
pensions, insurance, and capital markets sectors.

These include the
adoption of International Financial Reporting Standards (IFRS),
implementation of risk-based banking supervision, improving collateral
and land registries, and strengthening and enforcing creditor rights.