Nigeria's cabinet has approved a $1 billion concessionary loan from the African Development Bank (AfDB) to bolster budget financing in the country.
The AfDB loan will fetch an interest rate of 4.2% for 25 years with eight-year moratorium.
What the minister said:"There was financing of $1billion concessional financing, 25 years, eight years moratorium at about the same for 4.2% per annum, which was approved by the African Development Bank for this administration,"
"It was in recognition of the macro-economic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government,"
"The reward, as far as the African Development Bank, a concessional financing organization, was to provide $ 1 billion in general budget support."
Nigeria's minister also noted that the Federal Executive Council approved a cap of 2 trillion naira for refinancing expensive government debt, aiming to reduce debt servicing costs. Edun says this could save Nigeria about N50 billion or more in debt servicing.Since assuming office in May, President Bola Tinubu has initiated reforms to rejuvenate Africa's largest economy, which had declined for almost a decade. These reforms include the elimination of its expensive fuel subsidy and the liberalisation of the foreign exchange market, resulting in a devaluation of the naira by over 40%.
Source of the article: Business Insider Africa