FEC okays $1bn AfDB budget support financing

The Federal Executive Council (FEC) has approved a $1 billion concessional budget support financing from the African Development Bank (AfDB).

This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, at the end of the council meeting in Abuja on Monday.

He said the bank approved the budget support concessional financing with 25 and eight-year moratoriums in recognition of the macroeconomic measures being taken by the President Tinubu administration towards macro stability, restoring revenue, and improving the foreign exchange situation.

Edun stated: There was financing of $1 billion, concessional financing, 25 years, and an eight-year moratorium at about the same rate of 4.2% per annum, which was approved by the African Development Bank for this administration, and really, it was in recognition of the macroeconomic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government.

“The reward, as far as the African Development Bank, a concessional financing organisation, was concerned, was to provide $1 billion in general budget support.”

He added that the Council also approved a total limit of N2 trillion for the Ministry of Finance to bring down the rate of interest on the current outstanding

He said it was expected to help save N50 billion or more in debt servicing over time by giving back expensive debt refinancing with cheaper funding.

He added: “In order to keep working hard and maximising the ability of the government to use the markets and to take advantage of different situations and improve situations, the Federal Executive Council approved a total limit of N2 trillion to be available for use by the Ministry of Finance in order to go in and out of the market and essentially to, where possible, bring down the rate of interest on the current outstanding.

“So, essentially, it will be refinancing, and the view is that there will be an opportunity to save about N50 billion or more in debt servicing over time by giving back expensive debt refinancing with cheaper funding.”

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