Nigeria to get $500m AfDB loan before year-end

The African Development Bank has disclosed plans to disburse $500m to Nigeria before the end of 2025 as part of a broader $1bn budget support facility aimed at cushioning the effects of ongoing macroeconomic reforms.

An Executive Director at the AfDB representing Nigeria and São Tomé and Príncipe, Dr. Bode Oyetunde, confirmed the development to Reuters on the sidelines of the ongoing 31st Nigerian Economic Summit in Abuja.

According to him, the multilateral lender’s board is expected to approve the second tranche of the facility before year-end, following the successful release of the first $500 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 added that the government had initially requested $1.5 bn in assistance, but the bank settled on a $1 bn support package to be disbursed over two years.

“The government asked us for $1.5 bn. We were able to do $1 bn over two years. Last year, we provided $500 m in budget support. This year, we are looking to do another $500 m, subject to board approval,” he explained.

The current administration has implemented a string of sweeping economic measures since President Bola Tinubu took office in May 2023. These include the removal of the decades-long petrol subsidy, unification of multiple foreign exchange rates, and the introduction of tax and fiscal reforms to stabilise public finances and attract foreign investment.

Oyetunde noted that the AfDB’s budget support programme focuses on strengthening fiscal management, power sector reforms, and governance improvements, adding that the reforms, though painful, are vital for restoring investor confidence and ensuring long-term economic stability.

In November 2023, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Federal Executive Council had approved a $1 bn loan from the AfDB to support Nigeria’s budget deficit and reform agenda.

The support facility forms part of the AfDB’s broader strategy to assist member countries navigating post-COVID fiscal pressures, high debt burdens, and inflationary shocks driven by global economic uncertainty.

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 key infrastructure spending amid revenue shortfalls.

If approved, the AfDB’s latest $500m loan will add to the government’s growing pool of concessional financing, which officials say will be directed at power sector reforms, agricultural value-chain support, and fiscal consolidation initiatives.