The African Development Bank (AfDB) has announced plans to extend a $500m loan to Nigeria this year as part of a $1bn budget support programme, citing the country’s ongoing economic reforms under President Bola Tinubu as a major factor driving its decision.
Executive Director representing Nigeria and São Tomé and Príncipe on the AfDB Board, Bode Oyetunde, disclosed this on Monday during the Nigerian Economic Summit in Abuja. He said the facility, which is subject to board approval, could be finalized before the end of the year.
According to Oyetunde, the bank is providing the funding in recognition of Nigeria’s “bold and aggressive macroeconomic reforms” since President Tinubu assumed office in May 2023.
He noted that the AfDB intends to sustain its support for the country’s fiscal consolidation and structural transformation agenda.
“We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria,” Oyetunde told Reuters on the sidelines of the summit.
“They asked us for $1.5bn. We are able to do $1bn over two years. Last year, we provided $500m in budget support. This year, we are looking to do another $500m, subject to board approval.”
The $500m loan represents the second tranche of a two-year, $1bn budget support initiative designed to bolster Nigeria’s fiscal resilience and accelerate policy reforms in key economic sectors. The first tranche, amounting to $500m, was disbursed in 2024.
Since President Tinubu took office, Nigeria has implemented a series of sweeping economic measures, including the removal of long-standing fuel subsidies, unification of the foreign exchange market, and the introduction of comprehensive tax reforms. These steps aim to stabilize public finances, attract foreign investment, and restore confidence in the nation’s economy.
Oyetunde further explained that the AfDB’s engagement is focused on supporting Nigeria’s fiscal discipline and power sector reforms, two critical areas that underpin sustainable growth and job creation.
The power sector, in particular, has remained a key priority for the AfDB’s intervention in West Africa, given its centrality to industrial productivity and private sector expansion.
The multilateral lender’s endorsement comes amid renewed investor interest in Nigeria’s reform programme, with global financial institutions acknowledging the government’s efforts to address long-standing structural bottlenecks.
The latest support from the AfDB is expected to ease fiscal pressures on the federal government, strengthen its reform implementation capacity, and provide much-needed liquidity for developmental programmes in the medium term.
Analysts say the move signals a vote of confidence in Nigeria’s policy direction and could help catalyse additional multilateral and private sector funding as the country works to stabilize its economy and rebuild macroeconomic buffers.
