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The President of the African Development Bank, Akinwumi Adesina, said on Monday that the bank is looking to award $1 billion to the Nigerian government to address the deficit in the 2016 budget.

Adesina disclosed this after meeting with Vice President Yemi Osinbajo and other members of the Economic Management Team at the Presidential Villa, Abuja. The loan will be concessional with an interest of 1.2 percent.

“We have said that we are going to support the Nigerian government with the budget support to be able to deal with some of fiscal imbalance that they have,” Adesina said. “We are looking to consider an award of $1 billion to help to deal with that particular deficit.”

The AfDB President also said that the Abidjan-based multilateral lender will continue to offer strong support to Nigeria, particularly during this difficult time caused by the decline in oil prices.  

“The bank’s largest shareholder is Nigeria. It is very important for me to be here and to talk to the Nigerian government about the challenges and opportunities that are in Nigeria,” Adesina said. “I think the times are difficult and there is no doubt about that. But I want to commend the government for being bold in taking the right decisions. I think that the fact that the price of crude oil has gone down, is a big challenge because you have 98 per cent external forex revenue coming from the sector.”

The federal government plans to raise N900 billion from external sources and N984 billion from local sources to fund the N2.2 trillion deficit in the N6.06 trillion budget for 2016. Last month, the government approved a three-year rolling external borrowing plan targeted at raising low-cost financing from institutions such as the World Bank, African Development Bank, China Exim Bank, and the Japanese International Cooperation Agency.