The African Development Bank (AfDB) plans to disburse $500 million to Nigeria before the end of 2025, as part of a $1 billion budget support facility to mitigate the impact of ongoing macroeconomic reforms.
Dr. Bode Oyetunde, AfDB Executive Director for Nigeria and São Tomé and PrÃncipe, announced this on Monday during the 31st Nigerian Economic Summit in Abuja, as reported by Reuters.
The AfDB board is set to approve this second $500 million tranche before year-end, following the initial $500 million released in 2024.
Oyetunde emphasized the bank’s commitment to supporting Nigeria’s bold reforms under President Bola Tinubu, which include removing the petrol subsidy, unifying foreign exchange rates, and implementing tax and fiscal reforms to stabilize public finances and boost investor confidence.
The AfDB’s support targets improved fiscal management, power sector reforms, and governance enhancements, crucial for long-term economic stability despite short-term challenges.
In November 2023, Nigeria’s Finance Minister, Wale Edun, confirmed the approval of the $1 billion AfDB loan to address the budget deficit and advance reforms.
This facility aligns with AfDB’s strategy to aid member countries facing post-COVID fiscal pressures, high debt, and inflationary challenges.
Nigeria has intensified engagements with multilateral lenders like the World Bank and IMF to stabilize its balance of payments, strengthen social safety nets, and fund infrastructure amid revenue constraints.
The incoming $500 million will support power sector reforms, agricultural development, and fiscal consolidation efforts.
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