Nigeria needs more naira reform for $1.5bn World Bank loan, says country director

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LAGOS/ABUJA, December 10 (Reuters)The World Bank needs nigeria to bolster reforms to its currency, the naira, before it can approve a $1.5 billion loan, its country manager said on Thursday.

Nigeria needs support to survive low oil prices and weather the economic shock of the COVID-19 pandemic.

World Bank lending is often conditional on reforms, and its officials have previously said it “recommends” a more unified and flexible exchange rate. The Nigerian naira hit $500 to the dollar on the black market last month as the shortage of dollars weighed on the economy.

We recognize all that Nigeria has done,” Shubham Chaudhuri, World Bank Country Director for Nigeria, said in a webinar with reporters. “There has to be a little more.”

Nigeria’s central bank devalued the official rate by 15% in March and weakened the currency exchange rate in November and March.

But the gap between the official rate and the parallel markets remains significant. The situation is putting pressure on the economy and making it difficult for private companies to get the dollars they need to import into Nigeria. A central bank official previously told Reuters it could also lead to a slowdown in remittances and exporters may refuse to repatriate earnings.

(Reporting by Libby George and Chijioke Ohuocha; Editing by Mark Potter, Larry King)

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