The African Development Bank (AfDB) is set to approve a $500 million budget support loan to Nigeria before the end of 2025, according to Bode Oyetunde, the bank’s executive director representing Nigeria and São Tomé and Príncipe.
This loan forms part of a $1 billion budget support program aimed at bolstering Nigeria’s economic reforms under President Bola Tinubu.
The AfDB has been working closely with Nigeria to support its macroeconomic reforms, which include fiscal and power sector reforms.
The loan is expected to ease fiscal pressures on the federal government, strengthen its reform implementation capacity, and provide much-needed liquidity for developmental programs in the medium term.
Nigeria has implemented several economic reforms since Tinubu took office in May 2023, including removing fuel subsidies, unifying foreign exchange rates, and launching tax reforms aimed at stabilizing public finances and attracting investment.
Key Aspects of the Loan:
- Loan Amount: $500 million
- Purpose: Budget support for Nigeria’s economic reforms
- Program: Part of a $1 billion budget support program over two years
- Focus Areas: Fiscal and power sector reforms
- AfDB’s Active Portfolio in Nigeria: Approximately $4.4 billion as of July 2024
The AfDB’s support for Nigeria’s economic reforms is expected to have a positive impact on the country’s economic growth, poverty reduction, and climate action efforts.
The loan will help close the financing gap in the Federal Budget for the 2024/25 fiscal year, specifically supporting the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan.
