The African Development Bank (AfDB) has called off a loan to Nigeria that would have helped fund the country’s budget. It has instead redirected the money to specific projects, a vice president at the lender said yesterday, according to Reuters.
It could be recalled that the in late 2016, the AfDB agreed to lend Nigeria the first tranche of $600 million out of $1 billion. But negotiations over economic reform later bogged down, blocking attempts to secure the second tranche of $400 million
AfDB 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.
But 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.
Amadou Hott, the vice-president for power, energy, climate change and green growth, told Reuters in an interview during a Nordic-African business conference in Oslo that AfDB rather than loan Nigeria money to fund its budget, is likely to take at least some of that money and put it directly into projects.
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… “.