The devaluation of the Nigerian Naira has led to a significant foreign exchange gain of N8.6 billion for the Nigeria Identification for Development (ID4D) project. This initiative, backed by international financiers with the World Bank at the forefront, aims to ensure all Nigerians are enrolled for the National Identification Number (NIN).
The World Bank revealed this financial outcome in the 2023 audited financial statement for the ID4D project, which has been ongoing since 2020. The project, with a total funding of $430 million, is a collaborative effort supported by the International Development Association (IDA), the French Development Agency (AFD), and the European Investment Bank (EIB).
According to the financial report, funds provided by the international financiers in US Dollars (USD) or Euros (EUR) are converted into Nigerian Naira (NGN) upon withdrawal, based on the exchange rate prevailing on the date of withdrawal as determined by the Central Bank of Nigeria’s (CBN) Autonomous Foreign Exchange Market (AFEM).
The report detailed that the project’s USD and EUR-denominated accounts, managed by the National Identity Management Commission (NIMC) in conjunction with the CBN, received a total of $2,538.92 and €3.03 million within the year under review.
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The exchange rates showed a significant depreciation of the Naira over the year. At the start of the year, one USD was exchanged for N448.05, but by the end of the year, it had risen to N898.8. Similarly, one EUR which was exchanged for N478.3 in January 2023, closed the year at N993.9. This substantial decline in the Naira’s value resulted in a foreign exchange gain of N8.6 billion for the project.
The report stated, “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.”
This gain highlights the financial implications of currency fluctuations and underscores the impact of the Naira’s devaluation on international financial transactions and projects within Nigeria.
With the Naira now trading at approximately N1,600/$1 and N1,750/€, NIMC will have increased funds to address various project needs, including power backup systems, telecommunication improvements, CERT and SOC procurement, data recovery center upgrades, and CRM solutions.
As of June 2024, the World Bank reported a project disbursement rate of 37.37%, equating to $160.7 million out of the $430 million budget. To ensure full disbursement and project completion, the Bank recently announced a restructuring and extension beyond the original June 30, 2024, deadline.