AfDB approves $600 million budget support loan for Nigeria
The loan is the first tranche of a $1 billion budget support loan designed to finance the AfDB’s Economic Governance, Diversification and Competitiveness Support Program (EGDCSP) for Nigeria.
The African Development Bank (AfDB) today approved a $600 million loan for Nigeria to facilitate the implementation of the government’s budget and support fiscal and structural reforms in Africa’s largest economy.
The loan is the first tranche of a $1 billion budget support loan designed to finance the AfDB’s Economic Governance, Diversification and Competitiveness Support Program (EGDCSP) for Nigeria. The last tranche of $400 million will be approved in 2017, the AfDB said in a statement.
The Abidjan-based multilateral lender also said the loan will help Nigeria boost its depleting foreign exchange reserves, which would boost FX supply and stabilize the naira.
“We must think through innovative solutions to support our regional member countries in crisis situations like this,” said Akinwumi Adesina, AfDB President. “We must also provide them with the knowledge products they require to get back on track,” he added.
Nigeria’s economy has been hard hit by sharp decline in oil prices, which accounts for 70 percent of government revenue and over 90% of exports. The West African country has budgeted N6.06 trillion for 2016 with a deficit of N2.2 trillion. The government plans to finance the deficit by loans from local and external sources.
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