The Federal Government of Nigeria is seeking to borrow $500 million from the African Development Bank (AfDB) this year, as part of a $1 billion budget support program. This loan is aimed at supporting the country’s economic reforms introduced by President Bola Tinubu. According to Bode Oyetunde, who represents Nigeria and São Tomé and Príncipe on the AfDB board, the loan could be approved before the end of the year.

The AfDB’s support program is in response to Nigeria’s macroeconomic reforms, which have been implemented since President Tinubu took office in May 2023. Key reforms include the removal of fuel subsidies, the introduction of unified foreign exchange rates, and the launch of tax reforms. Oyetunde noted that the bank is focusing on fiscal and power sector reforms as part of its support program.

The $1 billion budget support program is scheduled to be disbursed over two years, with $500 million provided last year and another $500 million planned for this year. Oyetunde stated that the Nigerian government had requested $1.5 billion, but the AfDB is able to provide $1 billion. The loan is subject to board approval.

The economic reforms implemented by the Nigerian government aim to stabilize the economy and promote growth. The removal of fuel subsidies and the introduction of unified foreign exchange rates are expected to improve the business environment and attract foreign investment. The tax reforms are designed to increase revenue and reduce the country’s reliance on oil exports.

The AfDB’s support program is significant, as it demonstrates the bank’s confidence in Nigeria’s economic reforms. The loan will provide much-needed funding for the government’s budget and support the country’s efforts to diversify its economy. The approval of the loan is expected to have a positive impact on Nigeria’s economic development and strengthen its relationship with the AfDB.

The Nigerian government’s efforts to reform the economy are ongoing, and the AfDB’s support program is an important step in this process. As the country continues to implement its economic reforms, it is likely that the AfDB will play a key role in providing financial support and guidance. The outcome of the loan approval will be closely watched, as it will have significant implications for Nigeria’s economic development and its relationship with international financial institutions.