AfDB to lend Nigeria $500 million in budget support, says bank executive.

The African Development Bank has announced plans to provide Nigeria with US$500 million in budget support this year, forming part of a larger US$1 billion support facility over two years.

Key Details

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  Nigeria had requested approximately US$1.5 billion, but the Bank committed to a US$1 billion programme spread over two years.

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  In 2024 the first US$500 million tranche was provided; the additional US$500 million is expected to be approved by year-end, subject to the AfDB Board's clearance.

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  The funding is classified as budget support, meaning it directly supports Nigeria's general budget and reform agenda rather than specific infrastructure projects.

Focus Areas

The AfDB executive director representing Nigeria and São Tomé & Príncipe, Bode Oyetunde, stated the facility is in support of Nigeria's "very bold and aggressive macro-economic reforms" under President Bola Tinubu. The support is particularly targeted at reforms in the fiscal sector (public finances, tax base, subsidy removal) and the power sector, where Nigeria aims to improve efficiency and stability.

Why It Matters

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  The infusion of US$500 million provides Nigeria with additional fiscal space, helping to bridge budget deficits and support the government's reform agenda.

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  The Bank's backing showcases multilateral confidence in Nigeria's structural reforms and encourages other development partners and private investors to engage.

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  With the power sector reform being a cornerstone of the programme, the support may help improve Nigeria's electricity infrastructure and overall business environment, which are critical for growth.