The Board of Directors of the African Development Bank (AFDB) has okayed a loan of $288.5 million to Nigeria to aid the ongoing fight against COVID-19 pandemic and mitigate its impact on people and businesses.
AFDB added that the loan was designed to bolster the government’s plans of improving surveillance and response to COVID-19 emergencies, ease the impact on workers and businesses and strengthen the social protection system.
The bank approved the loan as its response to help mitigate the slump in oil prices and its impact on the national economy.
According to the, Senior Director of the African Development Bank for Nigeria , Ebrima Faal, 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.
Prior to the COVID-19 outbreak, Nigeria’s economy was projected to grow by 2.9% of GDP in 2020 and further expand by 3.3 percent in 2021. But with the advent of the pandemic and the slump in crude prices, the economy is expected to shrink by between 4.4 percent under a conservative baseline scenario, and 7.2 percent should the pandemic persist to end-2020.
Faal said beyond the country’s immediate economic recovery needs, the Bank and other development partners, will dialogue with the government on proposals for medium-term structural reforms to diversify and boost domestic revenues away from the oil sector.
The Bank has instituted strong fiduciary measures to monitor the use of COVID-19 funds, and will maintain dialogue, particularly with the Office of the Auditor General in Nigeria, to ensure adherence to the transparency and accountability of the funds, Faal said.
The Bank’s intervention aligns with its COVID-19 Response Facility (CRF); Ten-Year Strategy (2013-2022); and High 5 priorities, especially “Improve the quality of life for the people of Africa”. It is also consistent with the second strategic pillar of the recently approved Bank’s Country Strategy Paper 2020-2024 for Nigeria.
Nigeria, Africa’s most populous nation and the continent’s largest oil producer, is facing twin crises – a health epidemic caused by COVID-19, and an economic crunch largely occasioned by a global oil price plunge. As of June 6, the country reported 12,233 coronavirus cases, 3826 recoveries and 342 deaths.
About 40.1 percent of Nigerians live below the poverty line of $1.90 per day and it is feared that the fall in household income during the pandemic will result in wealth deterioration for both the formal and informal sector workers.