Reports reaching Nairametrics reveals that the African Development Bank (AfDB) has called off a loan to Nigeria. This loan would have aided the funding of the country’s budget, instead the AfDB has redirected the money to specific projects. This was disclosed by the bank’s Vice President for power, energy, climate change and green growth, Amadou Hott, while addressing the press in Oslo, Norway on Monday.
Why the loan was called off
According to sources, the AfDB had been in talks with Nigerian officials for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017. But Nigeria refused to meet the terms of 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.
What the money will now be used for
The bank chief stated that instead of loaning Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects.
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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, Hott said.
“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 … ” he said.