AfDB to lend $500m to Nigerian government before year-end

The African Development Bank (AfDB) has confirmed plans to disburse a $500 million loan to Nigeria before the end of 2025 as part of a $1 billion budget support package.

Executive Director representing Nigeria, São Tomé and Príncipe, Dr. Bode Oyetunde, told Reuters on the sidelines of the Nigerian Economic Summit in Abuja that the bank’s board is expected to approve the second tranche later this year, following the first $500 million released in 2024.

“We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria,” Oyetunde said.

He disclosed that the government initially sought $1.5 billion, but the AfDB settled on $1 billion to be disbursed over two years.

“The Government asked us for $1.5 billion. We are able to do $1 billion over two years. Last year, we provided $500 million in budget support. This year, we are looking at doing another $500 million, subject to board approval,” he added.

The AfDB loan targets fiscal management, governance reforms, and power sector improvement.

Since May 2023, the Tinubu administration has removed petrol subsidies, unified exchange rates, and introduced tax reforms to stabilise public finances.

The AfDB facility forms part of its wider strategy to help member states manage post-COVID debt and inflationary pressures.

Nigeria is also in talks with the World Bank and IMF as it seeks concessional financing to support social programmes and infrastructure.