A Central American development bank said on Friday it had approved an $800 million credit to shelter local countries from spiking global fuel prices, partially caused by Russia’s invasion of Ukraine, reports Reuters.
Central American nations have seen costs jump for fertilizer and staple regional foods like corn and beans, as a result of rising fuel prices.
The development may have put some development banks in Nigeria under scrutiny.
This is because most of theor operations are subjected to political considerations.
"It is either these institutions are not forthcoming for lack of competent staff with requisite knowledge and expertise to scrutinize some of the proposals or are weighed down by political and primodal considerations in disbursements and in most cases, are seen as their share of the national cake by the beneficiaries," says an analyst, who pleaded anonymity.
Speaking further, he said, “even the developmental role of CBN, through the various interventions have not been able to produce the desired results.“
But the officials of the Central American development bank were optimistic that the disbursemt will achieve the desired goal.
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This operation will have a direct economic impact for millions of consumers,” the president of the Central American Bank for Economic Integration (CABEI), Dante Mossi, said in a statement.
“The subsidies mitigate the impact from the increase in the cost of fuel on consumer products, basic services, transportation and supplies, among others,” Mossi added.
The CABEI indicated that each of the group’s eight regional members, both founding and non-founding countries, may receive up to $200 million in financing.
The bank, created 61 years ago to finance the development of Central American nations, also may expand the credit line based on external funding, the statement said.