The World Bank provided financial relief of $800m to help over three million impoverished and at-risk households cope with the impact of government actions like the elimination of fuel subsidies. 700,000 households in rural regions and 2.5 million households in urban regions were among the beneficiaries. The restructuring paper released by the World Bank outlines strategies to strengthen social safety net programs in response to escalating Inflation and economic difficulties. The Federal Government has asked for an 18-month extension, pushing the closing date from June 30, 2024, to December 31, 2025.
An update from its website on June 19, 2024, revealed that the extension aims to readjust project schedules and improve the effectiveness of the National Social Safety Net Program-Scale Up. The targeting system developed under the project has already reached 1,652 urban wards. Approximately 30 million individuals have benefited from social safety net initiatives since their inception. By May 2024, three million impoverished families had received emergency cash aid through these programs. Among the recipients, 700,000 hailed from rural locations while 2.5 million resided in urban settings.
FG to implement a monthly financial aid scheme for disadvantaged citizens.
More so, the project has successfully reached 1,652 urban wards with the new targeting system. The digital payment system has been enhanced to ensure cash transfers are delivered directly to beneficiaries’ accounts or wallets through a seamless processing method, while integrating the National Social Register with the National Identification Number (NIN) to improve the targeting system. On December 16, 2021, the NASSP-SU project was given the green light to offer safety net assistance to Nigeria’s underprivileged population. It officially launched on January 30, 2023.
Using this loan, the Federal Government intends to implement a monthly financial assistance initiative for disadvantaged Nigerians facing economic difficulties due to recent policy changes, like the elimination of fuel subsidies. However, the program came to an unexpected halt due to an investigation into claims of wrongdoing in the administration of the project by the Ministry of Humanitarian Affairs and Poverty Alleviation. In order to reinitiate cash transfers, the government is proposing a restructuring that involves transferring chairmanship of the project’s national steering committee from the Minister of Humanitarian Affairs and Poverty Alleviation to the Minister of Finance.
Nigeria has only received 39.38 percent of the total loan amount so far.
Furthermore, the extension request is a result of Nigeria’s struggle with elevated inflation reaching 33.2% in early 2024 due to the elimination of Fuel Subsidies and depreciation of the exchange rate. The approval is being requested for a Level II restructuring of the $800m National Social Safety Net Program Scale-Up project, extending the closing date to December 31, 2025, and modifying the benefit size and duration of cash transfers under component 1. This request is for the Country Director’s approval.
Also, the government’s ambitious plan to offer temporary Cash transfer support to those impacted by high inflation, following the removal of the fuel subsidy and other economic reforms, still hinges on the project despite previous setbacks. There are no outstanding financial or audit reports, and the audit requirements remain unchanged. Key service providers have experienced delays in procurement, prompting efforts to enhance the procurement team’s skills within the PIU. The World Bank will continue to offer hands-on assistance to bolster financial and procurement practices for the project. Nigeria has only received 39.38 percent of the total Loan amount so far, leaving a remaining balance of approximately $485 million to be released.
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Additionally, the Nigerian government aims to provide relief from inflation and economic changes by distributing ₦75,000 in temporary cash transfers to 15 million households, split into three monthly instalments. At the same time, the bank is in the process of creating a plan to assess and manage Security risks, providing guidance on how project participants and stakeholders can effectively reduce these risks. The bank documented two tragic incidents related to project staff. One staff member was injured in a road accident while returning from field work, while another was murdered by armed bandits. Additionally, another staff member sustained leg injuries in a separate road accident during a field exercise.