31 October 2017

Nigeria: AfDB Denies Cancelling $400 Million Loan to Nigeria

Photo: The Guardian
(file photo).

The African Development Bank, AfDB, on Tuesday restated its continuous support for the Federal Government's economic recovery efforts, denying reports it had cancelled a $400 million loan to Nigeria.

Reuters news agency had reported that the Bank called off negotiations for a loan to Nigeria that was meant to help government fund its budget.

The report quoted the Bank's Vice-President for Power, Energy, Climate Change & Green Growth, Amadou Hott, as making the disclosure on Monday in an interview during a Nordic-African business conference in Oslo, Norway.

Mr. Hott was reported to have said that the AfDB would rather be willing to redirect the fund to specific projects in Nigeria, than give government to fund the deficit in the 2017 budget.

According to the report, talks between AfDB Nigeria for the release of the second tranche of $1billion loan (about $400 billion) to shore up the country's 2017 budget was on for about a year.

But, Reuters said Nigeria refused the terms by the international lenders, including the World Bank, to enact various reforms, including allowing the Naira to float freely on the foreign exchange market.

But, the AfDB denied the report on Tuesday in a statement from its headquarters in Abidjan, Ivory Coast.

The statement, signed by the Bank's Director, Communication & External Relations, Victor Oladokun, said rather than cancel the loan, it was in consultations with the Nigerian government on how best to continue its support for its laudable Economic and Growth Recovery Plan through investment projects.

"The African Development Bank (www.AfDB.org) wishes to categorically refute the statement that it has "called off loans to Nigeria", as reported in Reuters and credited to AfDB Vice-President for Power, Energy, Climate and Green Growth Amadou Hott," the statement said.

"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."

Noting the support to the Nigerian government, the Bank said in November 2016, its Board 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.

It said an additional $400 million in support of the economic recovery efforts 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, IMF.

The Bank said its support to the ERGP through investment projects would help address existing structural challenges, including infrastructure, power, agriculture and support to boost private sector and job creation.

It reassured government of its full support for its continued reforms to diversify the economy and boost economic growth and development.

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