The African Development Bank’s Board of Directors on Wednesday finally approved the $600m loan for Nigeria, several months after the Federal Government had approached the lender for a budget-support facility.
The loan is supposed to help Nigeria plug its budget defciency as the nation struggles with its first downturn in more than 20 years. The $600m loan is the first tranche of a total $1bn budget support package. The second disbursement of $400m would be dependent upon the implementation of reforms and expected early next year, the bank’s Nigeria country director Ousmane Dore, said that the President of AfDB Dr. Akinwunmi Adesina, had on September 26 said that the bank was working on giving Nigeria loan facilities of $4.1bn between now and next year for unsympathetic sectors in Nigeria. The loans include $1bn at an acknowledge interest rate of 1.2% for Nigeria to address the 2016 budget deficiency and help in her economic recovery. Dr Adesina said this after the meeting held with the Vice-President Yemi Osinbajo and other members of the Economic Management Team at the Presidential Villa, Abuja.
As stated by the president of AFDB, the package includes $1bn in budget support; $300m to create jobs for up to 185,000 youths; $250m towards infrastructure development in the North-East; $1m grant to deal with challenges of Internally Displaced Persons; $300m for infrastructure development around Abuja, and $200m for the Transmission Company of Nigeria to improve its facilities, among others. Expressing that Nigeria was the largest shareholder in the bank, Dr Adesina said that the bank was in the country to offer its support in the face of the current hard times. He said, “I think the times are hard but I want to give kudos to the government for being bold in taking the right decisions.” I think that the fact that the price of crude oil has reduced is a big challenge, because you have 98% of external forex revenue coming from the sector. So, it has created calibrations; I wont say much about all the problems, but what is important,is the way forward.