AfDB Approves $500 Million Loan For Nigeria’s Economic Reforms

The African Development Bank (AfDB) Group has approved a $500 million loan to support Nigeria’s economic reform programme and its shift toward cleaner energy systems. The decision, taken by the Bank’s Board of Directors in Abidjan, Côte d’Ivoire, covers the 2024 and 2025 fiscal years and strengthens the second phase of the Economic Governance and Energy Transition Support Programme.

The loan advances structural reforms aimed at improving fiscal management and driving long-term changes in the power sector. The AfDB said the programme will consolidate gains recorded under the first phase, which stabilised fiscal operations and opened the door to energy-sector reforms.

Abdul Kamara, Director General of the AfDB Group’s Nigeria office, said the new phase is designed to deepen reforms, increase non-oil revenue, and create more fiscal space for national priorities.

The Bank listed three core areas of intervention. The first targets Nigeria’s fiscal framework, including public financial management, transparency, and efficiency in government spending. The goal is to reduce fiscal risks and strengthen revenue systems across key institutions.

The second supports the power sector, where Nigeria continues to struggle with low generation, weak transmission networks, and market imbalances. The programme will focus on reducing energy poverty, improving governance, and attracting private investment across the electricity value chain.

The third area supports Nigeria’s energy transition agenda. This includes implementing the National Energy Transition Plan, advancing climate adaptation and mitigation policies, introducing energy-efficiency standards for appliances, and updating Nigeria’s Nationally Determined Contribution for 2026–2030.

The loan will provide budget support to help the government manage the cost of reforms while pursuing broader macroeconomic stabilisation. The AfDB said the initiative aligns with Nigeria’s reform agenda and is central to restoring investor confidence.

Key government agencies will implement the programme, including the Ministry of Finance, Federal Inland Revenue Service, Office of the Auditor General, Debt Management Office, Ministry of Power, National Climate Change Council, Nigerian Electricity Regulatory Commission, and the Ministry of Environment. Private businesses are expected to benefit from an improved investment climate and clearer opportunities for partnerships at the state level.

The Bank said the reforms are expected to drive fiscal consolidation, support macroeconomic stability, and strengthen energy security. These steps remain central to attracting long-term capital for infrastructure and renewable energy projects. As of 31 October 2025, the AfDB’s active portfolio in Nigeria comprised 52 projects valued at $5.1 billion.