Nigeria to Finalize $1 Billion African Development Bank Loanby
Nigeria will finalize a $1 billion loan from the African Development Bank next month and could borrow more than $4 billion over the next two years as the continent’s most populous country seeks to shore up its budget.
The loan will have a 40-year term and comes with an interest rate of 1.2 percent, AfDB President Akinwumi Adesina said in an interview in Abuja, the Nigerian capital, on Monday. The development institution will also invest in agriculture and energy, he said.
“Nigeria doesn’t have a debt crisis, just a revenue challenge,” he said. “The loan is shortly going to the board for approval."
The funding will help the West African country overcome a slump in government revenue caused by a decline in the price and output of crude, the nation’s biggest source of foreign-exchange. Nigeria vies with Angola for the title of the continent’s largest oil producer. The economy is set to shrink in 2016 for the first time in 25 years, according to the International Monetary Fund.
The delayed approval of a 6.1 trillion-naira ($19.3 billion) budget stalled the government’s efforts to stimulate economic activity and the naira’s slump since the removal of a 197-199 per dollar peg on June 20 fueled inflation to the highest in more than a decade, extending a decline in consumer spending.