Forex crisis: Nigeria’s ID4D project gains N8.6 billion from Naira devaluation in 2023  (2024)

The devaluation of the Naira resulted in a forex gain of N8.6 billion for the Nigeria Identification for Development (ID4D) project, through which international financiers led by the World Bank are pushing for the enrollment of all Nigerians for the National Identification Number (NIN).

The World Bank disclosed this in the project’s 2023 audited financial statement just released.

The $430 million project started in 2020 is being funded jointly by the International Development Association (IDA), the French Development Agency (AFD), and the European Investment Bank (EIB).

According to the report, funds received from the financiers in US$ or in Euro (€) are translated into the Nigerian Naira (NGN) On withdrawal at the exchange rate ruling on the date of withdrawal based on the CBN Autonomous Foreign Exchange Market (AFEM).

Funds received

The report shows that the project’s USD and EURO-denominated accounts being managed by the National Identity Management Commission (NIMC) and the Central Bank of Nigeria (CBN) received a total of $2,538.92 and €3.03 million in the year under review.

The report indicated that one dollar which was exchanged for N448.05 at the beginning of the year, closed the year at N898.8, while one EURO that was exchanged for N478.3 in January 2023, closed the year at N993.9. The decline in the value of the Naira led to a forex gain of N8.6 billion.

“During the period, the Project’s transactions were carried out in local currency (NGN). Foreign Exchange gain of N8,607,679,554.68 is recognised,” the report stated.

What this means

With Naira now exchanging for about N1,600/$1 and N1,750/€, NIMC will now have more money to fund several outstanding aspects of the project, which include procurement of power backup systems; improvement of telecommunication links between NIMC’s critical backend sites; procurement of a Computer Emergency Response Team (CERT) and Security Operations Center (SOC); upgrading of the data recovery center (DRC); and procurement of a contact center and Customer Relationship Management (CRM) solutions.

According to the World Bank, the project disbursem*nt rate stood at 37.37% as of June 2024. This means that only about $160.7 million has been released out of the $430 million budgeted,

To ensure full disbursem*nt and realize the objectives of the project, the Bank last month announced the restructuring and extension of the project, which was originally designed to close on June 30, 2024.

More disbursem*nts are to be unlocked with the NIMC Amendment Bill

The World Bank in the project restructuring document released in July noted that Nigeria has yet to meet one of the conditions for the disbursem*nt of more funds for the implementation of the project.

“One final disbursem*nt condition which has yet to be met is the amendment of the NIMC Act to promote an inclusive and non-discriminatory legal and regulatory framework,” it said.

However, the NIMC in a statement issued last week disclosed that the Nigerian National Assembly has begun the process of repealing and enacting the NIMC Act No. 23. It added that the NIMC Amendment Bill represents a significant legislative endeavour to enhance the efficacy and inclusivity of the Identity Management System.

“The amendments seek to fortify the foundational framework of the NIMC and its operations by; Expanding the Scope of Registrable Persons.

“The benefit to the country is a more comprehensive and inclusive identification system, which enhances national security, facilitates efficient service delivery and promotes financial inclusion,” NIMC said in a statement signed by its Head of Corporate Communications, Kayode Adegoke.

What you should know

The ID4D project approved by the Board of IDA in 2020 is seeking to increase the number of persons with a national ID number, issued by the NIMC to facilitate easy access to digital services in the country.

• The project was designed to close on June 30, 2024, with several targets set for the country to achieve by that date. However, many of the targets have been missed, necessitating the restructuring and extension to 2026.

• According to NIMC, only 107.3 million Nigerians had been issued NIN as of April 2024.

• Aside from issuing NIN to 148 million Nigerians by 2024, the Bank listed other targets to include the issuance of NIN to at least 65 million female Nigerians by June 1, 2024, as well as 50 million NIN to children under 16 years of age.
• Other performance indicators set for the country include the development of pro-poor functional public and private services employing the foundational ID system for the purpose of authentication and service delivery; NIN enrolments in rural areas; and government personnel trained in best practices for legal and regulatory enabling environments for foundational ID, including privacy and data protection, all of which were to have been achieved by June 2024.