By Stanley Oronsaye September 28, 2010 01:05AM

The World Bank said its support to Nigeria in the wake of the global financial crisis has enabled the country to survive the turbulence of the period.In a statement on the bank’s website, the international financial institution affirms that its support to Nigeria’s ongoing economic reforms has helped to reduce the negative effects of the crisis.

The World Bank claimed the support, under the aegis of International Development Association (IDA), has helped Nigeria address key financial transparency issues that would buffer the country from future shock. The IDA, formed in 1960, is part of the World Bank that helps the world’s poorest countries.“By providing the first budget support to Nigeria in 30 years, the International Development Association was able to help the government arrest the slide in market confidence,” the report added.

The IDA operation provides budgetary support to the Nigerian government to offset the fiscal impact of the after effects of the global financial crisis. It also supports the government in maintaining its current economic reform path in the financial sector, fiscal policy, management, and governance.

Monetary support

“A $500 million development policy credit from IDA helped provide fiscal space at a time when government’s budget shortfall and borrowing requirement increased dramatically, primarily as a result of the global financial crisis and the concomitant fall in oil prices,” said the IDA statement.

It added that the IDA credit potentially prevented a broader collapse of the banking system in Nigeria. The Central Bank of Nigeria (CBN) last year injected N620 billion into eight banks in the wake of the global financial crisis to save the financial institutions from imminent collapse.Ismail Radwan, a senior economist with the World Bank, said the amount of credit needed to take Nigeria into the top 20 economies by the year 2020 would have to be generated internally.

Mr. Radwan based his optimism on the five pillars of ongoing reforms in the financial sector. These are improvement in banking supervision; improved credit information; conventional banks diversifying by introducing new products; credit guarantee schemes; and business development services to scale up business training for entrepreneurs.He said the World Bank was convinced that the intervention by the Central Bank in the banking sector last year was necessary in order to save an already bad situation and to create a platform for banks to be willing to lend to the real sector.

“Nigeria is a land of tremendous opportunities. We have all sort of people wanting to come to Nigeria to make money, and yet Nigerian banks don’t seem to see all the opportunities in this country,” Mr. Ridwan said.

World Bank on Nigeria

Minister of finance, Olusegun Aganga, said recently that the World Bank’s impression about Nigeria’s economic development was commendable. Mr. Aganga said based on the findings of the Bretton Woods institution, Nigeria was making good progress compared to other emerging economies.

“The World Bank gave an independent assessment about where we are, whether we are on the right track or not, and where the economy is today. We find some things very interesting in their presentation,” he said.He added that government was prepared to partner with the private sector in order to drive economic growth.

The IDA said from its intervention in Nigeria, it was able to identify a set of medium term actions required to achieve regulatory reform in banking, pensions, insurance, and capital markets sectors.These include the adoption of International Financial Reporting Standards (IFRS), implementation of risk-based banking supervision, improving collateral and land registries, and strengthening and enforcing creditor rights.

Source:NEXT