The World Bank has started releasing funds from the approved $800 million for the National Social Safety Net Program-Scale Up. As of Wednesday, approximately $299.99 million has been disbursed to Nigeria under this program, approved by the World Bank on December 16, 2021.
Documents from the World Bank confirmed this recent payment, leaving a pending balance of about $442.88 million, with roughly 37.5% of the total loan already disbursed.
The Federal Ministry of Humanitarian Affairs & Poverty Alleviation is set to implement the $800 million social safety net program, a conditional cash transfer initiative.
The Federal Government aims to run a monthly cash transfer program to support poor and vulnerable Nigerians impacted by recent policies, including the fuel subsidy removal. President Bola Tinubu officially launched the promised conditional cash transfer program in October 2023, targeting 15 million households nationwide to receive N75,000 within three months.
The Federal Government is actively seeking the services of a consulting firm to assist with upgrading the system for the cash transfer program, according to official documents.
The document partly read, “The Federal Republic of Nigeria has received financing from the World Bank toward the cost of the National Cash Transfer Office under the Federal Ministry of Humanitarian Affairs & Poverty Alleviation and implementing agency of the Client and intends to apply part of the proceeds toward payments under the contract for Upgrade of MIS for NASSP-SU.”
“The consulting services (“the Upgrade of MIS for NASSP-SU”) include carrying out the development, implementation, deployment, and maintenance of a user-friendly, interactive, web-based MIS System to support the activities of NASSP – -SU of the Federal Republic of Nigeria for effective and efficient delivery of Programme benefits to the Poor and Vulnerable. For the estimated level of effort (professional staff months) as contained in the TOR, for an implementation period of 120 days plus warranty and after-sales service; the expected start date of assignment, should be in the next three months from the advert date.”
This upgrade is necessary as the National Economic Council decided earlier not to use the social register from the previous administration of Muhammadu Buhari for running the conditional cash transfer program due to credibility issues.
The financing agreement document for the National Social Safety Net Program-Scale Up between the Federal Republic of Nigeria and the International Development Association of the World Bank sighted by our correspondents showed that the repayment will be made in installments, with the first payment due on January 15, 2027, and the last payment due on July 15, 2051.
The $800m loan obtained by the Federal Government attracts a maximum commitment charge rate of one-half of one 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, according to the document.
It also disclosed that the interest charge is one and a quarter per cent per annum on the withdrawn credit balance.
Also, a percentage of the principal amount of the loan is expected alongside the other charges, and this will increase over time.
While the first payment will be 1.65 per cent of the principal amount, the last payment will be 3.40 per cent.
