African Development Bank, AfDB, approved a $288.5 million loan to help Nigeria ease the impact of Coronavirus. The loan will also help the West African country through tough economic times due to the falling oil prices.
Furthermore, Nigeria is in talks with AfDB on medium-term structural reforms to diversify Nigeria’s economy and grow its non-oil revenues. In April, Nigeria received $3.4 billion from the IMF to avert the looming economic crisis from the pandemic.
The bank’s statement reveals that the loan will boost Nigeria’s surveillance and response towards the pandemic. It will also strengthen Her social protection program, reducing its impact on workers and businesses.e
“The proposed program will ensure that the fiscal position and the economy are sufficiently supported to weather the COVID-19 shocks, thereby limiting its potential adverse impact on livelihoods and the economy more generally,” -Ebrima Faal, Senior Director AfDB for Nigeria said.
COVID-19 accelerated Nigeria’s economic downturn, which was facing spiraling GDP levels and rising external vulnerabilities. Members of Buhari’s Economic Advisory Council expected oil revenues to dip by up to 80% due to a decline in prices and demand. As a result, the contractions put pressure on fiscal spending, which could push her external debt to $36 billion in 2020.
Before the pandemic, experts projected Nigeria’s economy to grow by 2.9% in 2020, and 3.3% in 2021. However, the pandemic and plummeting oil prices dropped projections a negative growth of 4.4% at best to 7% at worst.
However, Nigeria managed to protect Her oil industries in Q1 2020, by ramping up its oil production to 2.07m mbpd. The move helped grow its economy by 1.87% in the quarter, down from 2.55% in Q4 2019.