FEC okays AfDB’s $1bn budget support

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

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced this on Monday after the federal cabinet meeting presided over by President Bola Ahmed Tinubu at the Presidential Villa, Abuja.

He said the bank approved the budget to support concessional financing with 25 and eight years moratoriums in recognition of the macro economic measures taken by this administration towards macro stability, restoring revenue and improving the foreign exchange situation.

He said: “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.”

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Edun 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.

“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.

The minister also announced approval of funds to be lent to Abia State for waste management and rehabilitation of roads in Umuahia and Aba, in particular.

Edun, while speaking on the briefing by the Fiscal Policy and Tax Reform Committee, said the committee, which had been working for roughly 90 days, had impacted the economy by coming up with initial reforms and signposting the way forward in terms of important targets.