The African Development Bank (AfDB) is preparing a $1 billion budget support loan for Nigeria as part of efforts to back the federal government’s sweeping economic reforms. The loan, which is part of a two-year programme, could be approved before the end of the year, according to a Reuters report citing a bank executive.
Nigeria’s representative on the AfDB board said the facility is designed to bolster the government’s aggressive macroeconomic policy changes under President Bola Tinubu, which include the removal of fuel subsidies, the unification of foreign exchange rates, and the introduction of new tax policies.
Nigeria had initially requested $1.5 billion in support, but the bank will provide $1 billion over two years, with $500 million already disbursed in 2024 and another $500 million expected this year pending board approval. The support comes amid continued fiscal adjustments aimed at stabilising Africa’s largest economy and improving revenue mobilisation.
AfDB also highlighted that part of the programme will focus on strengthening fiscal discipline and reforming the power sector — two areas seen as critical to driving sustainable growth.
For MSMEs, the loan could bring indirect benefits if reforms lead to a more stable macroeconomic environment, reduced inflationary pressure, and improved access to energy, all of which are vital for small businesses struggling with high operating costs. The support also signals increased investor confidence in Nigeria’s economic direction, which could further boost opportunities for small and growing enterprises.
