Nigeria Set to Receive $500 Million AfDB Loan by Year-End to Support Economic Reforms
Nigeria is expected to receive a fresh $500 million loan from the African Development Bank (AfDB) before the end of 2025, marking the second phase of a $1 billion budget support facility designed to ease the impact of the country’s sweeping economic reforms. The facility, which aims to strengthen fiscal stability and promote sustainable growth, underscores AfDB’s continued backing of President Bola Tinubu’s reform agenda.
Dr. Bode Oyetunde, AfDB’s Executive Director representing Nigeria and São Tomé and Príncipe, confirmed the planned disbursement during the 31st Nigerian Economic Summit in Abuja. He revealed that the bank’s board is expected to approve the funding within the year, following the successful release of the first $500 million tranche in 2024. According to Oyetunde, Nigeria had initially requested $1.5 billion, but the bank agreed to provide $1 billion over two years to support the country’s fiscal reforms.
“We have been working strongly to support Nigeria’s bold and aggressive macroeconomic reforms under President Tinubu,” Oyetunde told Reuters. “Given these reforms, it was important to provide financial backing to ensure they succeed.” The AfDB official noted that the ongoing program targets areas such as fiscal management, power sector development, and governance enhancement — sectors critical to driving long-term growth and investor confidence.
Since assuming office in May 2023, President Tinubu’s administration has rolled out a series of significant policy changes, including the removal of petrol subsidies, the unification of exchange rates, and the introduction of new tax reforms. While these policies have caused short-term economic pain, they are widely viewed as essential for attracting investment, reducing public debt, and stabilizing Nigeria’s macroeconomic environment.
If approved, the upcoming $500 million AfDB loan will bolster Nigeria’s efforts to bridge budget deficits and sustain social and infrastructure spending amid declining oil revenues. The funds are expected to support key initiatives in power sector reforms, agricultural development, and fiscal consolidation. The move also reflects Nigeria’s deepening engagement with multilateral lenders such as the World Bank and International Monetary Fund (IMF) as it works to restore growth and ensure economic resilience in the post-COVID era.
source: punch