African Development Bank Loans Nigeria almost $300 million

The African Development Bank has loaned Nigeria over $228 million (888 NGN) to combat the economic effects of the coronavirus.

Nigeria has greatly suffered due to the fall in oil prices these last four months, as air travel and trade have been halted thanks to international lockdowns and quarantine procedures. The country depends on oil sales for 90% of all foreign export earnings, leaving it vulnerable when the price fluctuates.

The country’s finance minister Zainab Shamsuna Ahmed warned that the economy overall could shrink by up to 9% by the time the coronavirus pandemic is over.

Budget cuts have been proposed in the public sector in an attempt to reduce the damage, as basic healthcare spending is facing a potential halving of its existent budget. State education spending is facing substantial cuts as well.

This is the second emergency package that Nigeria has received from international funds this year, having previously received a $3.4 billion package from the IMF in April.

As the price of oil fell sharply back in April, the Central Bank of Nigeria’s (CBN) foreign-exchange reserves fell in tandem to a two-year low of $33.4 billion.  

Thanks to sales stabilising and rising once again in value to $40 per barrel, the CBN reserves have climbed to $36.6 billion as of June 1. The AfDB’s loan is still greatly needed, however, to support public spending and the wider economy.

Photo: Twitter, Presidency of Nigeria