The World Bank has issued a statement clarifying that the $10.5 million allocated to the Central Bank of Nigeria (CBN) is a grant, not a loan. This clarification comes after initial reports suggested that Nigeria had approached the World Bank for a loan to enhance the CBN’s technical capacity and modernize the country’s domestic payment infrastructure.
The grant is part of the Finance for Development Multi-Donor Trust Fund, a collaborative effort between the World Bank and the CBN aimed at integrating innovative technologies and data science into the CBN’s supervisory processes. This initiative seeks to address both long-standing and emerging challenges in Nigeria’s financial sector, particularly in improving the infrastructure for remittance payments.
The project, currently at the concept review stage, is structured around three key areas: strengthening institutional capacity, enhancing supervisory functions through advanced Supervisory Technology (SupTech) systems, and modernizing payment systems for remittances. The World Bank is expected to present the project for approval on June 12, 2025, with the CBN serving as the implementing agency.
This clarification highlights the World Bank’s commitment to supporting Nigeria’s financial sector development without adding to the country’s debt burden. The distinction between a grant and a loan is significant, as grants do not require repayment, unlike loans, which can increase a country’s external debt obligations.
In recent years, Nigeria has secured substantial financing from the World Bank, including $8.03 billion in loans under President Bola Tinubu’s administration. However, this $10.5 million allocation is specifically designated as a grant, reflecting the World Bank’s strategic support for Nigeria’s financial modernization efforts.
