Where are the billions? Analysing AfDB’s pledges to Nigeria over the past year
When it comes to Nigeria’s multilateral creditors, the African Development Bank (AfDB) stands out as one of the country’s largest and most reliable sources of credit.
According to data from the Debt Management Office, Nigeria’s loans from the AfDB have increased from approximately $3 billion in 2022 to $3.2 billion by the end of 2023.
This is up from $2.8 billion in 2021, demonstrating steady growth in the extension of credit to Nigeria.
The World Bank is the only multilateral creditor to have extended more credit to Nigeria than the AfDB.
Support from the AfDB has grown significantly since the Tinubu administration, with numerous pledges made over the past year to both public and private institutions, supporting various initiatives.
AfDB’s Financial Commitments to Nigeria
We looked at the AfDB website and from their records, between 2023 and March 2024, a total of 372.3 million UA has been approved for Nigeria.
For this year, its website showed only 37,548,813 UA was approved on March 15, 2024.
According to the AfDB, the Bank uses a unit of account (the “Unit of Account” or “UA”) equivalent to the International Monetary Fund’s Special Drawing Right (SDR) as its reporting currency.
The value of the SDR, which may vary from day to day, is currently computed daily in U.S. dollars by the IMF.
We also looked at the entirety of projects and amounts that have been approved for Nigeria since 1971 and as per their records, a total of 6.1 billion UA has been earmarked for Nigeria out of which 4.5 billion UA has been approved or completed while 1.4 billion UA is under implementation or ongoing.
186.5 million UA has been cancelled so far while the bulk of the cancellation occurred in 2016 at an estimated 173.8 million dollars.
Nairametrics also collated official press releases from the AfDB on pledges made to Nigeria in the form of financial support.
Some of these amounts may be part of the 372 million UA, but Nairametrics cannot independently verify.
However, these are the pledges that we have collated.
AfDB’s Financial Commitments to Nigeria Since 2023
As part of Nairametrics’ review of the government’s first year in office, we take a closer look at the various pledges from the AfDB over the past year, detailing the beneficiaries and the intended uses of the funds.
Here are the pledges made since last year per Nairametrics collation:
$1.44 billion investment in Nigeria
The African Development Bank (AfDB) had on May 22, 2024, announced an investment of $1.44 billion to aid the development of energy and power, transport, water, and sanitation infrastructure in Nigeria.
- Director-General of the AfDB’s Nigeria Country Department, Lamin Barrow, said Nigeria is having a huge infrastructure deficit problem, at the Nasarawa Investment Summit 2024, held from 15 – 16 May in Lafia, Nasarawa state.
- “To address this problem, the African Development Bank is supporting the federal and state governments to improve the national and state infrastructure. As of April 2024, 31 per cent of the Bank’s active portfolio, valued at $1.44 billion, is supporting infrastructure development in Nigeria,” Barrow stated.
$75 million loan with Nigeria’s Indorama Eleme Fertilizer and Chemicals Limited
On March 28, 2024, AfDB stated it signed a $75 million loan agreement with Nigeria’s Indorama Eleme Fertilizer and Chemicals Limited.
It explained the loan will enable Indorama to increase its fertilizer production and develop a port terminal for exports, supporting food production and food security across regional and international markets, while fostering job creation in Nigeria.
$50 million loan to Yobe State Government
On March 26, 2024, the Board of Directors of the AfDB stated it approved a $50 million loan for the Yobe State Environmental and Climate Change Action Project (ECCAP) to enhance climate change resilience, boost food security, and improve livelihoods for over 3.5 million people in northeast Nigeria.
While the project cost was estimated at $101.34 million, the African Development Bank pledged a $50 million loan.
$80 million To Ekiti Knowledge Zone Project
On February 22, 2024, AfDB stated it committed $80 million in loan financing to the Ekiti Knowledge Zone (EKZ) project in Ekiti State, describing the project as a hub for digital innovation and knowledge economy in Nigeria.
The Ekiti State Government was expected to commit $14.8 million towards the $94.8 million project.
$175 million financial package for UBA
On December 15, 2023, the AFDB said it approved a $175 million financial package for United Bank for Africa (UBA), comprising $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation program.
According to its statement, the long-term senior debt will enhance UBA’s capacity to finance projects in Nigeria in the key sectors inclusive of agriculture and related value chains.
$20 million Trade Finance Facility Agreement with FSDH Merchant Bank
On December 8, 2023, AfDB said it signed a $20 million Trade Finance Facility Agreement with FSDH Merchant Bank to support small- and medium-sized businesses in Nigeria’s industrial and manufacturing sectors.
$115 million for Abia state road rehabilitation
On June 30, 2023, AfDB stated it had approved a loan of $115 million to support a major road rehabilitation project in Nigeria’s Abia State.
“Financing for the project, estimated at a total cost of $263.80 million, will come through an African Development Bank loan of $100 million; a Canada–African Development Bank Climate Fund (CACF) loan of $15 million; and a $125 million co-financing loan from the Islamic Development Bank,” AfDB said in a statement.
$15 million loan to InfraCredit
On May 18, 2023, AfDB stated it approved a $15 million subordinated loan to Infrastructure Credit Guarantee Company Limited (InfraCredit) to strengthen its capital base and help close Nigeria’s infrastructure financing gap.
The financing was aimed at enabling InfraCredit to leverage domestic capital markets to bolster access to long-term local currency infrastructure financing in Nigeria.
$525,000 grant to AFN
On April 26, 2023, AfDB said it signed a $525,000 grant agreement with Africa Fintech Network (AFN) for the setup of the Africa Fintech Hub(link is external), an online portal that will serve as a one-stop shop for all fintech activities in Africa.
The agreement was signed on 4 April 2023, according to AfDB.
€362,000 to Yobe Basin-Trust Fund
On March 23, 2023, AfDB, signed a €362,000 grant agreement with Hadejia Jama’are Komadugu Yobe Basin-Trust Fund to prepare additional studies for the development of a strategic plan for managing water resources in the Komadugu-Yobe Basin in northern Nigeria.
“Specifically, the grant will support the preparation of a Resettlement Action Plan (RAP) for the Challawa Gorge Dam Watershed Management Project; a stakeholder engagement plan; a grievance redress mechanism, and stakeholder consultations involving riparian communities and the Lake Chad Basin Commission comprising Cameroon, Chad, Nigeria and Niger Republic.
The project will be implemented over eight months,” AfDB revealed in a statement.
How many pledges came in?
Nairametrics has been unable to confirm whether the pledges made to extend credit to institutions in Nigeria have been disbursed.
- Ahead of this publication, a Nairametrics analyst sent an inquiry to media@afdb.org seeking details on the financial commitments made to Nigeria by the African Development Bank Group since 2023.
- Specifically, Nairametrics requested information on which pledges had been fulfilled.
Nairametrics faced challenges in obtaining a response from the AfDB. Efforts to reach Christin Roby, an official in the AfDB’s Communications Department, were unsuccessful.
Eventually, Ms. Roby explained that the team was busy with the Annual Meetings and a response would likely come next week.
As of this publication, Nairametrics has not received a response from media@afdb.org regarding the inquiry.
FG’s perception of AfDB’s interventions
- On June 24, 2023, President Bola Ahmed Tinubu welcomed an investment of $520 million in specialised agro-processing zones by the AfDB.
- According to a statement from the presidency, Tinubu had praised AfDB’s president, Dr Adewunmi Adesina for further opening up the economy for investments that provide job opportunities and reduction in poverty.
- President Tinubu had assured Dr Adesina that the Federal Government would provide all the necessary assistance to ensure the sustenance of the projects, adding that electricity remained a priority area that needed urgent attention.
- The $520 million pledge was launched by AfDB and partners, as disclosed on its website on October 24, 2022.
- The Nigerian presidency notes the AfDB President’s visionary and noble endeavour to transform agriculture in Africa and ensure food security on the continent.
Nairametrics previously quoted the AfDB stating that its funding for development projects in Nigeria is worth around $4.4 billion.
