FOR reducing the level of endemic poverty in the country, the World Bank has promoted Nigeria from a low income country ranking to a medium income position with the privilege of borrowing from the Breton Wood's elite club, the International Bank for Reconstruction and Development (IBRD). The decision elevating the country's rating , according to the World bank Country Director for Nigeria , Ms. Marie Francoise Marie-Nelly, was taken at the last month's Spring meeting of the World Bank / International monetary Fund (IMF) in Washington.
She said the decision was taken after a review of the Nigeria's economic indication revealed that there was a reduction in poverty rate per capita in the country which has now dipped to 62.6 per cent from 64.2 per cent as well as improvement in revenue accretion.
The World Bank boss, who spoke to journalists in Abuja on the post-Spring meetings, said the implication of the promotion was that Nigeria now would have more access to resources from its creditors as it becomes eligible to borrow not only from the International Development Association (IDA) but also from the International Bank for Reconstruction And Development (IBRD).
She said: " This follows the Bank's resolve to give the country a 'blend' status in its 2014-2017 Country Partnership Strategy (CPS) document which would be release later this year. The blend status, which is for a period of six to seven years applies to countries with gross national income per capita of about $1,170."
Nigeria, before now, has been eligible to borrow only from IDA, which offered a 40-year payment plan with a 10-year grace period at no interest rate charge. Beneficiaries only pay a service charge of about 0.75 per cent.
The decision also followed the growth in Nigeria's revenue as her gross national income per capita had reached about $1,200 in the past two years, prompting the Bank to undertake an upgrade from its current IDA only status.
She however explained that the country would continue to benefit from both resources for seven years although the repayment conditions would now be reviewed.
While on the new status, the country would now adapt to new repayment plans as the IDA condition would change.
She gave further insight into the new plan : "Instead of having 40 year repayment it will be 25 year-repayment; the grace period moves down from 10 years to five years and you have an interest rate of about 1.3 to 1.5 per cent."
During the six to seven-year period, allocations fom the IDA is expected to be reviewed and phased out gradually while the IBRD allocation steps in as the only borrowing window.
She said: "So during these period, Nigeria will have more resources until it moves to the IBRD window."