The African Development Bank (AfDB) has announced plans to disburse $500 million to Nigeria before the end of 2025 as part of a $1 billion budget support package designed to cushion the impact of ongoing economic reforms. Executive Director of the AfDB representing Nigeria and São Tomé and Príncipe, Dr. Bode Oyetunde, disclosed this on Monday during the 31st Nigerian Economic Summit in Abuja.
Oyetunde explained that the bank’s board is expected to approve the second tranche of the support facility before year-end, following the successful release of the first $500 million in 2024.
“We have been working to support Nigeria’s bold and aggressive macroeconomic reforms under President Tinubu. Given these reforms, it was important to provide strong backing,” Oyetunde said.
He revealed that while the Nigerian government initially requested $1.5 billion in budget support, the AfDB settled on $1 billion to be disbursed over two years.
“The government asked us for $1.5 billion, but we are able to provide $1 billion over two years. Last year, we gave $500 million in budget support, and this year, we are looking to do another $500 million, subject to board approval,” he added.
Since taking office in May 2023, the Tinubu administration has introduced a series of major economic reforms, including the removal of the petrol subsidy, unification of multiple foreign exchange rates, and introduction of tax and fiscal measures aimed at improving public finances and boosting investor confidence.
Oyetunde noted that the AfDB’s budget support programme focuses on strengthening fiscal management, implementing power sector reforms, and enhancing governance structures. He acknowledged that while the reforms have been challenging, they remain crucial for restoring economic stability and attracting investment.
In November 2023, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the Federal Executive Council had approved a $1 billion AfDB loan to help bridge Nigeria’s budget deficit and support the government’s reform initiatives.
The AfDB facility aligns with the bank’s broader strategy to assist African countries grappling with post-pandemic fiscal pressures, debt challenges, and global inflationary shocks.
Nigeria has recently intensified its engagement with international financial institutions, including the World Bank and the International Monetary Fund, to stabilise its balance of payments, expand social welfare programmes, and sustain infrastructure investment amid dwindling revenues.
Once approved, the additional $500 million tranche is expected to support power sector improvements, agricultural value-chain development, and fiscal consolidation measures aimed at ensuring sustainable economic growth.
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