By Odunewu Segun
The African Development Bank (AfDB) last night said it might consider an additional $400 million for Nigeria to support its growth and recovery efforts and was in talks with the Nigerian Government on how to help it strengthen its economy.
Officials of the AfDB had been in talks with Nigeria for around a year to lend $400 million, the second tranche of a $1 billion loan, to shore up the country’s budget deficit.
You may recall that the Vice President at the bank for power, energy, climate change and green growth, Amadou Hott, said on Monday that the money was no longer for budget support and would instead be redirected to specific projects.
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On Monday, Hott, had said Nigeria the refusal of Nigeria to meet the terms of the bank, which include reforms such as allowing the free float of the Naira was responsible for the cancellation.
But in a statement on Tuesday, the bank said: An additional $400 million in support could be considered, if requested and approval by the board, as part of a larger coordinated effort with other development partners, including the World Bank and the International Monetary Fund”
Recall that Nigeria is still negotiating with the World Bank for a $1.6bn loan, which will help plug part of an expected $7.5bn deficit for 2017. And the World Bank, just like the IMF has on several occasion called on Nigeria to allow the Naira to float. A suggestion Nigeria’s authority has always flatly refused.
With the country focusing more on external debts, which are cheaper than Naira debts, these refusals could hurt not only current negotiations but also future plans of the FG to source external debts.