AfDB to disburse $500 million to Nigeria before 2025 ends, supporting Tinubu’s reforms with second tranche of $1bn budget support package

AfDB to disburse $500 million to Nigeria before the close of 2025, as part of a $1 billion budget support package aimed at cushioning the impact of sweeping macroeconomic reforms initiated by President Bola Tinubu’s administration.

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This confirmation came from Dr. Bode Oyetunde, the African Development Bank (AfDB) Executive Director for Nigeria and São Tomé and Príncipe, who spoke to Reuters on the sidelines of the 31st Nigerian Economic Summit held in Abuja on Monday.

Oyetunde revealed that the bank’s board is expected to approve the second tranche of the funding before the year ends, following the successful disbursement of $500 million in 2024.

“We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria,” he said.

Although the Nigerian government originally requested $1.5 billion, the AfDB settled on a $1 billion package to be spread across two years.

“Last year, we provided $500 million in budget support. This year, we are looking to do another $500 million, subject to board approval,” Oyetunde explained.

The support is part of the bank’s broader assistance to member countries grappling with post-COVID fiscal pressure, high debt, and inflationary shocks.

The ongoing reforms supported by the AfDB include fiscal restructuring, power sector reforms, and broader governance improvements.

Since taking office in May 2023, President Tinubu has overseen significant economic changes — such as the removal of the petrol subsidy, exchange rate unification, and tax policy reform — all of which have triggered mixed reactions among citizens.

While painful in the short term, Oyetunde emphasised that these changes are essential for restoring investor confidence and achieving long-term stability.

If approved, the incoming $500 million will further boost Nigeria’s access to concessional loans, which the government has prioritised over commercial debt to manage its deficit and sustain public investments.

The funds are expected to support power sector reform, agriculture value chains, and fiscal consolidation, reinforcing Nigeria’s strategy to attract capital and reinvigorate economic growth.

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Nigeria has also strengthened ties with other multilateral institutions, including the World Bank and the IMF, to stabilise its macroeconomic environment amid currency volatility, subsidy backlash, and declining public revenue.