FG to Receive $500m AfDB Loan Before Year-End

The African Development Bank’s second tranche loan aims to strengthen Nigeria’s fiscal and structural reform efforts.

The Federal Government is set to receive a $500 million loan from the African Development Bank (AfDB) before the end of 2025 as part of a $1 billion budget support package designed to cushion the impact of Nigeria’s ongoing economic reforms.

Executive Director at the AfDB representing Nigeria and São Tomé and Príncipe, Dr. Bode Oyetunde, confirmed the development to Reuters on the sidelines of the 31st Nigerian Economic Summit in Abuja.

He explained that the bank’s board is expected to consider and approve the second tranche before the end of the year, following the successful disbursement of the first $500 million in 2024.

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“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.

According to him, the Federal Government initially requested $1.5 billion in assistance, but the AfDB agreed on a $1 billion facility to be released in two phases. “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 added.

Since President Bola Tinubu assumed office in May 2023, the administration has embarked on a series of fiscal and monetary reforms, including the removal of petrol subsidies, unification of the foreign exchange market, and new tax measures aimed at stabilising public finances and attracting investment.

Oyetunde said the AfDB’s budget support programme is focused on improving fiscal management, strengthening governance institutions, and advancing reforms in the power sector. While acknowledging that the reforms have been difficult, he described them as necessary to restore investor confidence and drive long-term economic stability.

In November 2023, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the Federal Executive Council had approved the $1 billion AfDB loan to help close Nigeria’s budget deficit and support the reform agenda.

The AfDB facility forms part of the bank’s wider strategy to assist member countries facing post-pandemic fiscal challenges, rising debt levels, and inflationary pressures. Nigeria, like several African economies, has deepened its engagement with multilateral lenders including the World Bank and the International Monetary Fund to stabilise its balance of payments, strengthen social protection programmes, and sustain critical infrastructure investments amid revenue constraints.

Once approved, the $500 million disbursement will add to Nigeria’s concessional financing pool and support government-led initiatives in fiscal consolidation, power, and agricultural value-chain development.