The World Bank has fully disbursed a $1.5 billion loan to Nigeria in record time, following the government's implementation of major economic reforms. The loan, part of the Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Policy Financing initiative, was released in two tranches within six months of approval.

Key Details:

- First tranche: $750 million (IDA credit) - 12-year maturity, 6-year grace period

- Second tranche: $750 million (IBRD loan) - 24-year maturity, 11-year grace period

- Approval date: June 13, 2024

- First disbursement: July 2, 2024

- Second disbursement: November 2024

The rapid disbursement was triggered by Nigeria's implementation of three major reforms:

1. Fuel Subsidy Removal

- Complete deregulation of the fuel market

- Petrol prices now aligned with international market rates

- Over fivefold increase in fuel prices since mid-2023

2. Tax Reform

- New tax bill submitted to National Assembly in October 2024

- Proposed VAT increase to 10% by 2025

- Measures to simplify tax compliance

- Expanded input tax credits for businesses

3. Social Protection Reform

- Mandated use of National Social Registry for social programs

- Introduction of N25,000 cash transfers to vulnerable households

- Target: 15 million households (currently reached: ~4 million)

- CNG vehicle conversion program launched

Public Response and Impact:

- Protests in major cities over increased living costs

- Government defends reforms as necessary for economic stability

- Relief measures implemented but facing implementation challenges

Broader Context:

- Nigeria has secured $6.95 billion in World Bank loans over 18 months

- Additional $1.65 billion in loans under consideration for 2025

- Current World Bank debt: $16.32 billion (38% of Nigeria's external debt)

- Projects in pipeline focus on displaced persons, education, and nutrition

The World Bank has praised Nigeria's commitment to reform, noting the unprecedented speed of implementation while acknowledging the challenging impact on citizens.