The World Bank has asked Nigeria to strengthen reforms of the naira before it can approve a $1.5 billion loan, Reuters reported the lender’s country director as saying yesterday. World Bank loans are often contingent upon reforms, and its officials said previously it was “recommending” a more unified, flexible exchange rate.
The naira hit N500 per dollar on the parallel market last month as a dollar scarcity squeezed the economy. “We recognise how much Nigeria has done,” Shubham Chaudhuri, World Bank’s Nigeria Country Director, said during a webinar with journalists.
“There needs to be a little bit more,” he added. The Central Bank of Nigeria (CBN) devalued the official rate by 15 per cent in March and weakened the foreign exchange rate for exchange bureaux in November and in March. But the gap between the official rate and the parallel markets remains large. The situation is pressuring the economy and making it difficult for private companies to get the dollars they need to import into Nigeria.