The African Development Bank’s board approved a $600 million loan for Nigeria.
The loan is part of the plans approved by the Nigerian government to borrow from abroad as the country seeks to move its economy away from a recession.
It is also expected to cover the country’s 2016 budget deficit.
According to an official of the AfDB, Ousman Dore the $600 million is the first part of the $1 billion loan package agreed with the Nigerian Government.
Dore, who is the bank’s Country director in Nigeria also says the bank will consider the remaining part of the loan when the government fully explains how it plans to overcome the economic recession.
He says the economic recovery plan must be a package of comprehensive reforms, including even exchange rate policy, the consistency with regards to the monetary policy and structural reforms,” If it meets the bank’s reform requirements, the second part of the loan is expect to be approved next year.
Nigeria was Africa’s largest economy and its top oil producer, but its public finances have suffered as the price of crude oil dropped around the world.
The economic crisis has also worsened due to attacks on the country’s pipelines by a militant group known as the Niger Delta Avengers.
The attack by militants had driven oil production to around 700,000 bpd, below its 2016 budget assumption of 2.2 million barrels per day.
Nigeria was last in a recession, for less than a year, in 1991, and experienced a prolonged one that started in 1982 and last until 1984.
The government has so far disbursed more than 700 billion naira in capital expenditure this year, part of a record 6.06 trillion naira ($30 billion) budget for 2016.
At a meting with the bank’s representatives last month, Nigeria’s, Minister of Budget and National Planning Senator Udoma Udo Udoma says the government is committing money into infrastructure development, processing of export zones, and also providing loans through the Central Bank of Nigeria (CBN) at a single digit to support farming in Nigeria.
Senator Udo Udoma while giving an overview of the government’s plan to reflate the economy and spend out of the recession, said that government is trying to contain the militancy in the Niger–Delta which has affected oil production in the country, hoping to restore production to 2.2 million barrels a day at the end of the year.
