African Development Bank (AfDB) approves $600-million loan for Nigeria

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Executive Directors of the African Development Bank (AfDB) announced on Wednesday, November 2, 2016 that the bank had approved a US $600-million loan- being the first tranche of a US $1-billion budget support loan to help finance Nigeria’s Economic Governance, Diversification and Competitiveness Support Program (EGDCSP). The second and final tranche of US $400 million will be released next year.

 

In a statement released on its website, the Bank reasoned that;

This operation is part of a two-fiscal-year (2016-2017) programmatic counter-cyclical fiscal support in a context where the Federal Government of Nigeria is implementing reforms to achieve efficiency in the business of government, combat corruption and promote diversification and competitiveness of the economy. It will help the government create fiscal space to facilitate a smooth implementation of the Government’s budget, support fiscal and structural reforms, and improve the targeting of social sector spending to protect the most vulnerable segments of the population.

It will assist the country’s efforts to quickly build a buffer of foreign exchange reserves, which would contribute to easing pressure on the foreign exchange market and stabilizing the Naira.

Nigeria’s success in its efforts to achieve macroeconomic stability and economic recovery would signal the end of the current recession, which, if prolonged, has potential to severely affect the economies of neighbouring countries in West and Central Africa.

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