The African Development Bank (AfDB) has indicated that it plans to disburse $500 million to Nigeria before the close of 2025 as part of a two-year, $1 billion budget support facility intended to assist the country’s ongoing macroeconomic reforms.
Dr Bode Oyetunde, Executive Director at the AfDB representing Nigeria and São Tomé and Príncipe, confirmed the development to Reuters on Monday while attending the 31st Nigerian Economic Summit in Abuja.
He noted that the board of the multilateral lender is expected to approve the release of the second tranche before the end of the year, following the successful disbursement of the first $500 million 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 Nigerian government had initially requested $1.5 billion in assistance, but the AfDB settled on a $1 billion support package to be delivered over two years. “The government asked us for $1.5 billion. We are able to do $1 billion over two years. Last year, we provided $500 million in budget support. This year, we are looking to do another $500 million, subject to board approval,” he said.
The facility is designed to support Nigeria’s fiscal consolidation, power sector reforms, and governance improvements. According to Oyetunde, while some of the reforms implemented by the current administration have been challenging, they are considered necessary for restoring investor confidence and stabilising the country’s economy in the long term.
Since President Bola Tinubu assumed office in May 2023, his administration has introduced measures, including the removal of the longstanding petrol subsidy, the unification of multiple foreign exchange rates, and tax and fiscal reforms aimed at strengthening public finances and attracting investment.
The loan forms part of the AfDB’s broader strategy to assist member countries facing post-pandemic fiscal pressures, high debt burdens, and inflationary shocks arising from global economic uncertainty.
In November 2023, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Federal Executive Council had approved a $1 billion facility from the AfDB to support the nation’s budget and reform agenda.
Officials have said that, if approved, the second $500 million tranche will be directed to power sector reforms, agricultural value-chain development, and fiscal consolidation initiatives, complementing other concessional financing the government has secured from multilateral lenders, including the World Bank and International Monetary Fund.
Dr. Oyetunde emphasised that the AfDB’s engagement with Nigeria is aimed at providing structured, results-oriented support to ensure the country’s fiscal and economic stability while maintaining adherence to governance and accountability standards.
