By Emmanuel Nduka Obisue
The African Development Bank (AfDB) has announced plans to disburse $500 million to Nigeria before the end of 2025, as part of a broader $1 billion budget support facility designed to cushion the effects of ongoing macroeconomic reforms.
Executive Director of the AfDB representing Nigeria and São Tomé and Príncipe, Dr. Bode Oyetunde, confirmed the development to Reuters on Monday on the sidelines of the 31st Nigerian Economic Summit in Abuja.
According to him, the bank’s board is expected to approve the second tranche of the facility before year-end, following the successful release of the first $500 million in 2024.
“We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria,” Oyetunde said.
He explained that the Nigerian Government had initially requested $1.5 billion in assistance, but the AfDB settled on a $1 billion support package to be disbursed over two years.
“The government asked us for $1.5 billion. We are able to do $1 billion over two years. Last year, we provided $500 million in budget support. This year, we are looking to do another $500 million, subject to board approval,” he added.
Heritage Times HT reports that the Tinubu administration has implemented a series of sweeping economic measures since assuming office in May 2023. These include the removal of the long-standing petrol subsidy, the unification of multiple foreign exchange rates, and the introduction of tax and fiscal reforms aimed at stabilising public finances and attracting foreign investment.
Oyetunde noted that the AfDB’s budget support programme focuses on strengthening fiscal management, advancing power sector reforms, and improving governance. He emphasised that while the reforms have been difficult, they are critical for restoring investor confidence and ensuring long-term economic stability.
In November 2023, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Federal Executive Council had approved a $1 billion loan from the AfDB to support Nigeria’s budget deficit and reform agenda.
The facility forms part of the AfDB’s wider strategy to assist member countries facing post-COVID fiscal pressures, high debt burdens, and inflationary shocks triggered by global economic uncertainties.
Nigeria has in recent months intensified engagement with multilateral lenders, including the World Bank and the International Monetary Fund, as it seeks to stabilise its balance of payments, strengthen social safety nets, and sustain infrastructure spending amid revenue shortfalls.
If approved, the AfDB’s latest $500 million loan will add to the government’s growing pool of concessional financing, which officials say will be channelled towards power sector reforms, agricultural value-chain support, and fiscal consolidation initiatives.
