President of the African Development Bank (AfDB), Mr. Akinwumi Adesina
Nigeria got a lifeline on Monday as the African Development Bank (AfDB) said it would support the country with the sum of $1 billion to help it address the N2.2 trillion deficit in the 2016 budget.
AfDB President, Akinwunmi Adesina, who disclosed this to State House correspondents after meeting with Vice President, Yemi Osinbajo, and the Economic Management Team (EMT) at the State House, Abuja, said the facility would attract a 1.2 per cent interest.
This is Adesina’s first official visit to his country of origin since he became president of the bank last year.
He said that between 2016 and 2017 the bank would provide the sum of $4.1 billion to Nigeria to fund power, infrastructure, agriculture and the private sector and the Small and Medium size Enterprises financing and lending scheme.
Adesina said the bank’s lending portfolio in Nigeria would grow to a total of $10 billion by 2019.
Disagreeing with those saying Nigeria is in a debt crisis, the AfDB president said Nigeria was only experiencing liquidity problem.
He said the bank recognised that power remained the most important challenge driving inflation in the country and had therefore decided to invest in a total of 1,400 megawatt of projects this year and 1,387 megawatt of project by 2017 to revamp the energy sector.
Adesina said, “We have a very strong delegation team to meet the Vice President and the economic management team, because the bank’s (ADB) largest shareholder is Nigeria.
“It is very important for me to be here and to talk to the Nigerian government about the challenges and opportunities that are in Nigeria. I think the times are difficult there is no doubt about that, but I want to commend the government for being bold in taking the right decisions. I think that the fact that the price of crude oil has gone down is a big challenge because you have 98 per cent external forex revenue coming from the sector. So it has created calibrations, I’m not going to go into the details of all the problems but what is important is that what we going to do about it.
“I’m not here to lecture the Nigerian government; I’m here to support very strongly. We have said that we are going to support the Nigerian government with the budget support to be able to deal with some of the fiscal imbalance that they have.
“We are looking to consider for an award $1 billion to help to deal with that particular deficit. In addition to that, there are other challenges that the economy has in terms of diversifying and deepening the level of diversification in critical sectors; so agriculture, solid minerals, manufacturing as well as industrial sector are very important. So the bank is going to provide in total between 2016 and 2017 $4.1 billion to Nigeria in various sectors such as power, infrastructure and 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.
“So let me just say that the issues that we think are important are the need to further deepen the diversification of the rest of the economy, and the macro-economic stability as well as fiscal stability in the country. We have asked for the need for better synergies between the macro policy side and monetary policy side and also the fiscal policy side of the economy.
“And, of course, we also recognize that power is perhaps the most important challenge that is driving inflation in the country. So we expect in our portfolio this year to invest in a total of 1.400 megawatts of projects to focus on the energy sector and by 2017 we plan to invest in 1,387 megawatts of project for the sector.”