Recession: AFDB To Boost Nigeria Economy With $4.1bn Loan

Akinwumi Adesina, the AfDB President and his led delegation disclosed this during a meeting with Vice President, Yemi Osinbajo and the economic management team on Monday at the Aso Rock Presidential Villa in Abuja.

According to Adesina, the $4.1 billion support would be provided between 2016 and 2017 for such sectors as power, agriculture and infrastructure as well as “for the private sector, the SMEs financing and lending.”

He said he expects the AfDB’s portfolio in Nigeria would not decrease, but would actually grow as the bank expected to invest a total of $10 billion in the country by 2019.

“In addition to that, the are other challenges that the economy has which is in terms diversifying and deepening the level of diversification in critical sectors, so agriculture, solid minerals, manufacturing as well as industrial sector is very important.

“So the bank is going to provide in total between 2016/2017, $4.1 billion to Nigeria in various of power, infrastructure to agriculture and for the private sector the SMEs financing and lending.

“I expect that our portfolio in Nigeria will not decrease it will actually grow, we expect to invest in Nigeria by 2019 a total of $10 billion.”

He also disclosed that in this year alone, the AfDB was going to provide $1 billion budget support to the country.

He said: “The bank’s largest shareholder is Nigeria. It’s very important for me to be here and to talk to the Nigerian government about the challenges and opportunities that are in Nigeria. The times are difficult, there is doubt about that; but I want to commend the government for being bold in taking the right decisions.

“The issues we think are important are the needs to further deepen the diversification of the rest of the economy and also to ensure macro-economic stability as well as fiscal stability in the country.

He said his delegation also discussed with Nigeria’s economic team on how to invest in area of women and youths employment in Nigeria “as well as to look for opportunities to support access to finance by supporting the Development Bank of Nigeria with $500m which will help to provide cheap financing for the real sector that the country wants to grow.”

Adesina said the AfDB would also provide $100 million to the Bank of Industry to be able to lend to small and medium size enterprises as well as finance the Bank of Agriculture to be able to reform itself for more financing.

He confirmed that Nigeria was currently facing hard times. “Let me just say that Nigeria has tough times but Nigeria is not falling apart and when people talk about debt crisis, Nigeria is not in debt crisis. If you look at the fiscal deficit of this country with regard to the GDP, is about 3 or 3.5 per cent is still way below the five per cent for the Fiscal Responsibility Act.

“If you look terms of the debt to the GDP ratio for Nigeria is 15 per cent. So there is no debt crisis in Nigeria, what you have is liquidity problem and we are trying about to be able to the country to be able to drive down inflation and to be able to make sure we are working with the government to be able to provide incentives to the private sector,” he added.