AfDB Denies Calling Off $400m Loan for Nigeria

African Development Bank, AfDB, Headquarters

AfDB Denies Calling Off $400m Loan for Nigeria

African Development Bank (AfDB) has said it has not called off $400m loan it has scheduled to release to Nigeria to shore up 2017 budget.

There were reports in the media that the AfDB has called off the support for Nigeria.

a statement by Victor Oladokun, Director, Communication and External Relations of AfDB this afternoon said: “The African Development Bank wishes to categorically refute the statement that it has ‘called off loans to Nigeria’, as reported in Reuters and credited to AfDB Vice-President for Power, Energy, Climate and Green Growth, Amadou Hott.

“The African Development Bank is highly encouraged by the economic recovery of Nigeria from recession and salutes the Government’s efforts towards diversification of the economy. The Bank also strongly supports the Economic and Growth Recovery Plan of the Government and efforts to stem corruption and strengthen fiscal consolidation and efficiency”.

Hott, in an interview during a Nordic-African business conference in Oslo was reported to have said: “Rather than loan Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects”. 

Because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing, Hott said.

Nigeria’s 2017 budget, 7.44 trillion naira, is just one in a series of record budgets that the government has faced obstacles funding, pushing it to seek loans from overseas.

In late 2016, the AfDB agreed to lend Nigeria a first tranche of $600 million out of $1 billion. But negotiations over economic reform later bogged down, blocking attempts to secure the second tranche of $400 million, sources told Reuters then.

Earlier this month, the head of Nigeria’s Debt Management Office said the country is still in talks with the World Bank for a $1.6 billion loan, which will help plug part of an expected $7.5 billion deficit for 2017.