- The Federal Executive Council (FEC) approves a concessional budget support of $1 billion from the African Development Bank (AfDB)
- The funds, with a 25-year term and eight years moratorium at 4.2% per annum, aim to enhance Nigeria’s macroeconomic stability
The Federal Executive Council (FEC) has given its approval for a concessional budget support financing of $1 billion from the African Development Bank (AfDB).
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, made the announcement on Monday following the federal cabinet meeting chaired by President Bola Ahmed Tinubu at the Presidential Villa, Abuja.
Edun revealed that the AfDB sanctioned the budget to provide concessional financing with 25 and eight years moratoriums, acknowledging the macroeconomic measures implemented by the current administration to achieve macro stability, restore revenue, and enhance the foreign exchange situation.
“There was financing of $1 billion, 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,” stated Edun.
Additionally, the council approved a total limit of N2 trillion for the Ministry of Finance to lower the interest rate on the current outstanding, aiming to save N50 billion or more in debt servicing over time. This move involves replacing expensive debt refinancing with more cost-effective funding.
“To maximize the government’s ability to use the markets and take advantage of different situations, the Federal Executive Council approved a total limit of N2 trillion for use by the Ministry of Finance. This will allow the ministry to go in and out of the market and, where possible, bring down the rate of interest on the current outstanding,” Edun explained.
The minister also disclosed the approval of funds to be allocated to Abia State for waste management and the rehabilitation of roads in Umuahia and Aba, specifically.
Edun, while addressing the briefing by the Fiscal Policy and Tax Reform Committee, highlighted the committee’s impact on the economy after approximately 90 days of work. The committee initiated initial reforms and outlined crucial targets for the economy’s future direction.