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World Bank grants Nigeria’s request for a $2.25 billion loan

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According to a statement released by the World Bank on Thursday, Nigeria has been granted a $2.25 billion loan to help stabilize its economy after implementing reforms and increasing aid to the underprivileged.

Nigeria wants to borrow up to $2.25 billion from the World Bank, according to Finance Minister Wale Edun’s April announcement. The proposal is expected to be approved by the bank’s board in June.

The boldest reforms the nation has seen in decades were started by Nigerian President Bola Tinubu in May of last year. He eliminated a popular but expensive fuel subsidy and twice devalued the currency substantially in an attempt to spur economic growth. However, the actions exacerbated a situation caused by rising costs of living and increased inflation.

The International Monetary Fund predicted that gasoline subsidies could account for as much as 3% of GDP this year due to the devaluation since rises in pump prices have not kept pace with their dollar cost.

Additionally, labour unions have been putting pressure on Tinubu to undo changes. According to the World Bank, it has authorized two loans totalling $750 million to speed up tax mobilization and $1.5 billion to support Nigeria’s reforms.

Nigeria has taken “initial critical steps to restore macroeconomic stability, boost revenues, and create the conditions to reignite growth and poverty reduction have been taken.” Nigeria has also started important reforms to address economic distortions and strengthen its fiscal outlook.

According to the World Bank, the loan will aid Nigeria in its efforts to increase non-oil revenue and foster fiscal sustainability, both of which will enable the West African country to provide high-quality public services.

Musings From Abroad

IMF lowers Botswana’s growth projection for 2024

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In a statement, the International Monetary Fund (IMF) reduced its earlier April estimate of 3.6% growth for Botswana to 1%, primarily because of decreased diamond production.

In addition, the IMF warned that a decline in mineral income would cause the budget deficit to balloon to 6% from 3.45% and urged the diamond-rich nation in southern Africa to think twice before embarking on new infrastructure projects to support the economy.

“The continued (economic) slowdown is mainly due to a fall in diamond production,” said IMF said in a statement released late on Friday.

“Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the execution of the ambitious capital budget should be slowed down to contain the deterioration of the deficit and prioritize projects with the highest returns,” the IMF said.

 

The demand prognosis for diamonds, which are typically regarded as luxury goods, has decreased due to weaker consumer demand and a weakening in the global economy.

Finance Minister Peggy Serame predicted in February that the economy would expand by 4.2%, but a few months later the central bank issued a warning, stating that the ongoing challenges in the world diamond market made it doubtful that this goal would be met.

Diamond sales account for 30–40% of Botswana’s total revenue and 75% of its foreign exchange profits.

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Musings From Abroad

Russian state company, Malian junta negotiate nuclear deal

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According to Rosatom, the Russian state nuclear business and the ruling military junta in Mali have signed three cooperation agreements and discussed several projects, including the construction of a low-power nuclear power plant with Russian design, on Wednesday.

For years, Rosatom has been pursuing a charm offensive in Africa in an attempt to secure business through the signing of cooperation agreements with nations all over the continent. As part of that effort, closer ties have been made with juntas in the Sahel region of West Africa, who have retreated from conventional Western allies after seizing power in coups before 2020.

Junta-led administrations in the West African states of Burkina Faso, Guinea, Niger Republic, and Mali have all tilted towards Russia for military ties, severing relations with former colony France and its international ally, the United States.

In a statement, Rosatom claimed that it had met with Assimi Goita, the head of Mali’s junta, on July 2 and 3. It has talks with junta authorities in charge of energy, education, and economics.

The statement added that in addition to talking about a “strategic project to build a Russian-designed low-power nuclear power plant in Mali,” junta leaders and Rosatom also discussed geological exploration projects and solar power generating.

Regarding the projected low-power nuclear power station that might be constructed in Mali, Rosatom withheld information.

“The parties agreed to continue maintaining close contacts and periodically coordinate positions as joint work progresses,” it said.

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