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The African Development Bank has announced that it has approved trade finance loans worth up to $300 million for First Bank of Nigeria and $50 million for FSDH Merchant Bank.

In a statement released on Wednesday, AfDB said the facilities will enable the Nigerian banks to provide support to local businesses involved in import-export activities.

Earlier in June, AfDB approved a $150 million line of credit for United Bank for Africa (UBA) to finance infrastructure in Nigeria, particularly in the power sector.

The Abidjan-based multilateral institution said the facilities to First Bank and FSDH Merchant Bank are part of broader efforts to provide countercyclical support to the Nigerian economy at a time of falling oil prices, which has caused shortages in foreign exchange supply.

The AfDB said the financing will help to address the critical market demand for trade finance and dollar liquidity by supporting key sectors in Nigeria’s economy such as agri-business, chemicals, construction, engineering, food processing, manufacturing, and non-traditional exports.

“If fully utilized, counting rollovers, the interventions are expected to facilitate about $2.5 billion of export-import related activity in intermediate and finished goods, raw materials and equipment to support economic growth and tax generation over a 3.5-year period,” the AfDB said.

First Bank is Nigeria’s oldest and largest banking institution with over 960 branches (including 750 in Nigeria) spread across 12 countries. The bank is a leading provider of trade finance in Nigeria and a strong financier of the country’s SME sector.

FSDH Merchant, on the other hand, is Nigeria’s largest merchant bank and a leading provider of finance and advisory support to emerging local corporates in sectors such as manufacturing, industry, services, and agribusiness.