Nigeria secures US$1bn low-cost loan from AfDB

THIS was disclosed by Finance Minister Olawale Edun at the State House correspondents on Monday after the council meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja.

The AfDB loan will fetch an interest rate of 4,2 percent for 25 years with eight-year moratorium.

What the minister said:

“There was financing of US$1 billion concessional financing, 25 years, eight years moratorium at about the same for 4,2 percent per annum, which was approved by the African Development Bank for this administration,”

“It was in recognition of the macro-economic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government,”

“The reward, as far as the African Development

Bank, a concessional financing organisation, was to provide US$ billion in general budget support.”

Nigeria's minister also noted that the Federal Executive Council approved a cap of 2 trillion naira for refinancing expensive government debt, aiming to reduce debt servicing costs. Edun says this could save Nigeria about N50 billion or more in debt servicing.

Nigeria has been spending the bulk of its revenue on debt service due to several factors including low tax collection. Nigeria's debt service-to-revenue ratio in 2023 stands at 73,5 per cent.

“In order to keep working hard and maximising the ability of the government to use the markets and to take advantage of different situations and improve situations, the Federal Executive Council approved a total limit of N2 trillion to be available for use by the Ministry of Finance.