AfDB denies calling off loans to Nigeria
- Reaffirms strong support for Government’s economic recovery efforts
By SUNDAY ODIBASHI
The African Development Bank has refuted the report that it has “called off loans to Nigeria”. The report was credited to AfDB Vice-President for Power, Energy, Climate and Green Growth Amadou Hott.
The Bank in a statement declared; “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.”
It was recalled that 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.
The Bank indicated that 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.
It was acknowledged that 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 assured the Nigerian Government of its full support for its continued reforms to diversify the economy and boost economic growth and development.
It was reported that the AfDB has called off a loan to Nigeria that would have helped fund the country’s budget. The report indicated that the Bank has instead, redirected the money to specific projects.
The report noted that the Bank had been in talks with Nigeria for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017, as the government tried to reinvigorate its stagnant economy with heavy spending.
“However, Nigeria has not met the terms of the international lenders, which also included the World Bank, to enact various reforms, including allowing its currency, the naira, to float freely on the foreign exchange market.
“Rather than loan Nigeria money to fund its budget, the Bank revealed that it is likely to take at least some of that money and “put it directly into projects.” The report cited Amadou Hott, African Development Bank Vice-President for power, energy, climate change and green growth, to have told Reuters in an interview during a Nordic-African business conference in Oslo.
Hott was said to have remarked that because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing.