Photo File: President Bola Ahmed Tinubu

The African Development Bank (AfDB) has confirmed plans to disburse an additional $500 million to Nigeria by the end of 2025, as part of a broader $1 billion budget support facility aimed at cushioning the impact of ongoing macroeconomic reforms.

The update was disclosed by Dr. Bode Oyetunde, Executive Director at the AfDB representing Nigeria and São Tomé and Príncipe, during an interview with Reuters on the sidelines of the 31st Nigerian Economic Summit held in Abuja on Monday.

According to Dr. Oyetunde, the bank’s board is expected to approve the second tranche of the facility in the coming months, 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,” he stated.

He further revealed that the Nigerian government had initially requested $1.5 billion in financial support, but the bank committed to $1 billion, to be disbursed 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 explained.

Reforms Driving the Support

Since taking office in May 2023, President Bola Tinubu’s administration has introduced a range of sweeping economic reforms, including: The removal of the petrol subsidy, Unification of the foreign exchange rates, and Tax and fiscal reforms to improve government revenue and restore macroeconomic stability.

Dr. Oyetunde said the AfDB’s support package focuses on key areas such as fiscal management, power sector reforms, and governance enhancements. He acknowledged the short-term pain of the reforms but stressed their importance in restoring investor confidence and achieving long-term economic sustainability.

The AfDB’s budget support facility is aligned with its broader post-COVID recovery strategy for member countries, which are grappling with fiscal pressures, inflation, and rising debt burdens in a volatile global economic environment.

In November 2023, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced Federal Executive Council approval for a $1 billion AfDB loan, designed to support the country’s budget deficit and reform agenda.

Nigeria has since intensified its engagement with multilateral lenders including the World Bank and the International Monetary Fund (IMF), as it seeks to stabilise its balance of payments, strengthen social protection programmes, and sustain infrastructure investment amid revenue challenges.

If approved, the AfDB’s second $500 million disbursement will add to Nigeria’s growing pool of concessional financing, which government officials say will be channeled into power sector reforms, agricultural value-chain development, and fiscal consolidation efforts.