Nigeria secures $2.2bn loan, budget support package to bolster economy

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Nigeria’s economic outlook received a boost with the announcement of a $2.2 billion loan from the World Bank and additional budget support from the African Development Bank (AfDB).

The news came from Finance Minister Wale Edun during a press briefing at the conclusion of Nigeria’s participation in the World Bank/International Monetary Fund Spring Meetings in Washington D.C.

Edun highlighted the significance of this loan, emphasizing the low-interest rate – a key factor in managing Nigeria’s debt burden. He also noted that this is part of a broader strategy to tap into various sources of international funding.

These sources include diaspora remittances, foreign portfolio investments, and facilities from other development partners. This diversification of funding sources can lessen Nigeria’s dependence on any single lender and potentially improve loan terms in the future.

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Speaking on the sources of international funding to the Nigerian economy, Edun listed diaspora remittances, foreign portfolio investments, and facilities from the World Bank and other international development partners.

He stated, “We have qualified for the processing just this week to the Board of Directors of the World bank of a total package of $2.25 billion of what you can call ‘the closest you can get to a free lunch’- virtually a grant. It’s for about 10- 20 years moratorium and about 1% interest.

“In addition, there is a similar budgetary support – low-interest funding from the African Development Bank (AfDB) and, clearly, there are ongoing discussions with foreign direct investors across many sectors.”

The specific details of the budget support facility from the AfDB remain undisclosed, but it signifies continued collaboration between Nigeria and the African development institution. Together, these financial instruments aim to support Nigeria’s economic development efforts.