BREAKING NEWS, Business
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THE board of the African Development Bank, AfDB, on Wednesday, November 2, approved a $600 million loan for Nigeria to enable it tackle its budget deficit and wriggle out of ongoing economic recession.
Ousmane Dore, the bank’s Nigeria country director, who broke the news, said the facility was the first tranche of the $1 billion budget support package expected from the bank.
According to Dore, the second disbursement of $400 million would depend on the implementation of reforms.
The AfDB official said one of the main triggers for the release of the remaining tranche would be when the government spelt out its plan for overcoming its current economic challenges.
“The economic recovery plan that the government is working on must be a package of comprehensive reforms, including even exchange rate policy, the consistency with regards to the monetary policy and structural reforms,” he said in a report.
If it meets the bank’s reform requirements, the tranche is expected to be approved by the board early next year.
Akinwunmi Adesina, president of the AfDB, had on September 26 said the bank was working on giving Nigeria loan facilities of $4.1bn between now and next year for critical sectors of the economy.
The loans include $1bn at a concessionary interest rate of 1.2 percent for Nigeria to address the 2016 budget deficit and aid its economic recovery.
Adesina made revealed the plan after a meeting with Vice-President Yemi Osinbajo and other members of the Economic Management Team at the Presidential Villa, Abuja.
Nigeria’s economy has been shrinking largely as a result of a plunge in oil prices since mid-2014. Attacks on energy facilities in the Niger Delta have also cut crude production by around a third since the start of the year.
The bank noted that oil generates around 70 percent of Nigerian government revenues. The drop in prices has left Nigeria struggling to fund a record N6.06 trillion ($20 billion) 2016 budget that aims to stimulate growth by tripling capital expenditure.
— Nov 3, 2016 @ 1:50 GMT
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