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 programme. The loan is intended to back the 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 programme responds to Nigeria’s macro‑economic reforms that have been underway since President Tinubu took office in May 2023. Key measures include the removal of fuel subsidies, the introduction of a unified foreign‑exchange rate, and the launch of tax reforms. Oyetunde noted that the bank is concentrating on fiscal and power‑sector reforms as part of its assistance.
The $1 billion budget‑support programme is scheduled to be disbursed over two years: $500 million was provided last year, and another $500 million is planned for this year. While the Nigerian government had requested $1.5 billion, the AfDB is able to offer $1 billion, subject to board approval.
The reforms aim to stabilise the economy and promote growth. Removing fuel subsidies and adopting a unified exchange rate are expected to improve the business environment and attract foreign investment, while tax reforms are designed to increase revenue and reduce reliance on oil exports. The AfDB’s programme signals confidence in these reforms and will provide much‑needed funding for the government’s budget, supporting Nigeria’s efforts to diversify its economy.
Approval of the loan is anticipated to have a positive impact on Nigeria’s economic development and to strengthen its relationship with the AfDB. As the country continues to implement its reforms, the AfDB is likely to remain a key source of financial support and guidance, and the outcome of the loan approval will be closely watched for its implications for Nigeria’s development and its ties with international financial institutions.
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