African Development Bank dismisses claims Nigeria to lose $400m facility

Following reports that the African Development Bank (AfDB) had decided against moving forward with its direct budget-support loan to Nigeria because of her failure to meet the stipulated terms, the bank has come out to refute the claims, expressing its commitment to the arrangement and praising Nigeria’s recovery effort.

Amadou Hott, AfDB’s Vice-President for Power, Energy, Climate and Green Growth, had been quoted by Reuters following an interview during a Nordic-African business conference in Oslo that plans to release $400 million, as second tranche of a $1 billion loan to shore up Nigeria’s budget for 2017, had taken a hit over failure by the government to meet the specified terms.

Hott had said that instead of a direct loan to Nigeria to fund its budget, the AfDB was likely to take at least some of that money and “put it directly into projects”.

He revealed that AfDB’s loans wiould be more targeted, saying, “It’s hundreds of millions of dollars, just in one go, that we were supposed to provide in budget support, but we will move into real projects”.

Part of the listed terms that Nigeria was said to have failed to meet by its international lenders like the World Bank, include allowing its currency to float freely on the foreign exchange market and enacting a host of other reforms in its financial system.

Responding however, the AfDB came out with an official statement dismissing the expressed position in the interview, while reaffirming its commitment to the budget support arrangement.

It said, “The African Development Bank wishes to categorically refute the statement that it has ‘called off loans to Nigeria’, as reported in Reuters and credited to AfDB Vice-President for Power, Energy, Climate and Green Growth Amadou Hott.

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“The African Development Bank is highly encouraged by the economic recovery of Nigeria from recession and salutes the Government’s efforts towards diversification of the economy. The Bank also strongly supports the Economic and Growth Recovery Plan of the Government and efforts to stem corruption and strengthen fiscal consolidation and efficiency.

“In November 2016, the Board of the African Development Bank approved a $600-million loan to support Nigeria’s efforts to cope with macroeconomic and fiscal shocks that arose from the massive decline in price of crude oil. An additional $400 million in support could be considered, if requested and approved by the Board, as part of a larger coordinated effort with other development partners, including the World Bank and the International Monetary Fund.

“The African Development Bank is in consultations with the Government on how best to continue its support for its laudable Economic and Growth Recovery Plan through investment projects that will help address existing structural challenges, including infrastructure, power, agriculture and support to boost private sector and job creation.

“The Bank assures the Nigerian Government of its full support for its continued reforms to diversify the economy and boost economic growth and development”.

 

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