Despite the fact that the board did not give any explanation behind its activity, the choice stunned Nigerian authorities, as the bank had in September 2016 in fact affirmed the $1billion credit office for the nation.
A senior official however said that the bank is yet to be convinced about some of the economic measures that Nigeria has adopted towards coming out of the recession earlier than 2019 being speculated at many international fora.
According to the bank, the loan is aimed at helping Africa’s largest economy implement it’s 2016 budget deficit, even as its recession in more than 20 years bites harder on businesses and the general populace.
The AfDB country director, Ousmane Dore put it this way: “The loan has been technically approved, but will be released in tranches, depending on how the country (Nigeria) is able to implement agreed reforms.
“The economic recovery plan that the government is working on must be a package of comprehensive reforms, including even exchange rate policy, its consistency with regard to the monetary policy and structural reforms,” he said.
Confirming that Nigeria had been informed of the new development, he said there were still some concerns on the reforms as they affect their implementation on Nigeria’s banking system.
The bank noted that there is expectations that revenue from other sectors will be capable of reducing the current over 70 per cent government revenues from oil and gas.
It acknowledged that the sharp drop in oil prices has left Nigeria struggling to fund its 2016 budget, having $2.2 billion deficit.
But analysts said there might be a fresh application from Nigeria next year, accompanied by evidence of improvement in the bank’s reform requirements before the balance of $400 million will be released for the country