Connect with us

Business

AfDB shocks Nigeria, releases only $600m of $1bn loan promised

Published

on

AfDB shocks Nigeria, releases only $600m of $1bn loan promised

The board of the African Development Bank (AfDB) on Wednesday authorized the release of only $600 million of the $1billion loan facility promised to Nigeria.

Though the board did not give any reason for its action, the decision shocked Nigerian officials, as the bank had in September 2016 technically approved the $1billion loan facility for the country.

A senior official however said that the bank is yet to be convinced about some of the economic measures that Nigeria has adopted towards coming out of the recession earlier than 2019 being speculated at many international fora.

According to the bank, the loan is aimed at helping Africa’s largest economy implement it’s 2016 budget deficit, even as its recession in more than 20 years bites harder on businesses and the general populace.

The AfDB country director, Ousmane Dore put it this way: “The loan has been technically approved, but will be released in tranches, depending on how the country (Nigeria) is able to implement agreed reforms.

Read also: Again oil prices drop as OPEC members split

“The economic recovery plan that the government is working on must be a package of comprehensive reforms, including even exchange rate policy, its consistency with regard to the monetary policy and structural reforms,” he said.

Confirming that Nigeria had been informed of the new development, he said there were still some concerns on the reforms as they affect their implementation on Nigeria’s banking system.

The bank noted that there is expectations that revenue from other sectors will be capable of reducing the current over 70 per cent government revenues from oil and gas.

It acknowledged that the sharp drop in oil prices has left Nigeria struggling to fund its 2016 budget, having $2.2 billion deficit.

But analysts said there might be a fresh application from Nigeria next year, accompanied by evidence of improvement in the bank’s reform requirements before the balance of $400 million will be released for the country.
By Emma Eke….

Join the conversation

Opinions

Click to comment

0 Comments

  1. Roland Uchendu Pele

    November 3, 2016 at 2:16 pm

    Apparently, the idea is to instigate another loan application for the $400m balance in 2017. Banks are happy when borrowers come crawling. Nigeria is experiencing one of its lowest moments, ergo they can play with us all they want.

  2. yanju omotodun

    November 3, 2016 at 3:28 pm

    I support the idea too. let the money will be given to us in tranches to see how it is being utilized. Because if the money is given once, I trust Nigerian leaders, they might even diversify it into something else. but with this, Nigeria government will be eager to show the AFDB that they are utilizing the money well so as to get the other tranches of the money.

  3. JOHNSON PETER

    November 3, 2016 at 3:38 pm

    why will they give us the loan in tranches? I urge the federal government not to receive the $400m until they are ready to loan us the $1billion we demanded . What is wrong with the Akinwumi Adeshina that he is undermining his own country.

Leave a Reply

Your email address will not be published. Required fields are marked *

sixteen − 13 =

Investigations