World bank clarifies $10.5m support to CBN is grant under development trust, not loan

The World Bank has clarified that the proposed $10.5 million funding for the Central Bank of Nigeria (CBN) is a grant, not a loan, correcting earlier misconceptions sparked by details on its website.

A source within the World Bank, who spoke on the condition of anonymity on Friday, April 4, stated that the funds are being provided under the Finance for Development Multi-Donor Trust Fund, a collaborative platform that supports development initiatives without adding to a country’s debt burden.

Contrary to initial reports suggesting Nigeria was seeking a loan to boost the CBN’s technical capabilities and overhaul domestic payment systems, the World Bank stressed that the initiative is not tied to its conventional lending arms, the International Development Association (IDA) or the International Bank for Reconstruction and Development (IBRD), which typically handle loans to countries like Nigeria.

Instead, the grant is part of a strategic partnership aimed at helping the CBN adopt modern, technology-driven supervisory tools, improve risk-based financial oversight, and enhance domestic payment infrastructure, especially for remittance flows.

According to project details previously published on the World Bank’s website, the proposed ‘CBN Technical Assistance Facility’ is designed to integrate innovative technologies into the bank’s regulatory framework.

It seeks to build institutional capacity and provide the apex bank with the tools needed to navigate Nigeria’s complex and rapidly changing financial environment.

Currently in the concept review stage, the project is expected to be presented for board approval on June 12, 2025.

The CBN will lead implementation efforts, working closely with the World Bank to ensure successful delivery of the initiative.