Finance Minister Olawale Edun announced the Federal Executive Council’s (FEC) approval of a $1 billion concessional loan from the African Development Bank (AfDB) aimed at bolstering the budget and enhancing foreign exchange reserves. Edun revealed the loan details, citing a 4.2% interest rate over 25 years with an eight-year moratorium, following a cabinet meeting in Abuja.
“In support of ongoing economic reforms, the Federal Executive Council has endorsed a $1 billion concessional loan to improve forex availability and bolster the general budget,” Edun stated.
He further elaborated on the loan’s intended use, emphasising its role in powering economic initiatives, particularly in the power sector, social inclusion, and broader fiscal policy reforms.
Additionally, the cabinet sanctioned a 2 trillion naira limit to refinance high-cost government debt, aiming to reduce debt servicing expenses that have consumed a significant portion of the country’s revenue due to lower tax collection.
“The goal is to save approximately 50 billion naira or more in debt servicing costs by replacing expensive debt with more affordable funding,” Edun explained.
President Bola Tinubu’s sweeping reforms, including the removal of costly petrol subsidies and the streamlining of multiple exchange rates, signify a bold step toward revitalising Nigeria’s economy. These measures aim to attract investors, revive stagnant growth, address high debt levels, and mitigate double-digit inflation that has plagued the nation for nearly a decade.