AfDB to assist Nigeria fix post-COVID-19 shocks

The African Development Bank (AfDB) says it would support Nigeria to address some emerging shocks triggered by the ravaging impact of COVID-19 pandemic on the global and Nigerian economies.

The pandemic has negatively impacted global markets, including the international crude crude oil market driving down prices to unprecedented low levels.

Nigeria, whose economy is dependent on revenues from crude oil export, has been severely devastated.

Within three months (between March and May), the Federal Government has revised the benchmark crude oil price in its 2020 Budget thrice.

Apart the initial review from $57 per barrel contained in the approved Appropriation Act last December to $30 per barrel, the price was rebased to $25, and to $28 per barrel early this week.

All the reviews and adjustments are part of efforts to raise funds to finance the huge deficit in the budget as a result of shocks from the distortions association with the pandemic.

AfDB to rescue

But, the AfDB on Friday committed to support Nigeria address some of the shocks and assist the country’s economy back on its footing post-COVID-19.

The Board of Directors of the Bank disclosed this in its new Country Strategy Paper (CSP) 2020-2024 approved for Nigeria.

Through the implementation of the CSP, the Bank said its support would focus on interventions in sectors that would strengthen public health infrastructure.

The support would also help accelerate efforts towards economic transformation and diversification of export earnings and fiscal revenue from crude oil.

The five-year strategy paper would build on the successes and challenges of the 2013-2019 edition, and incorporates emerging developmental realities and opportunities shaping Nigerias political and economic landscape, in the post-COVID-19 period.

Senior Director for the African Development Bank in Nigeria, Ebrima Faal, re-affirmed the Bank’s support for Nigeria’s socio-economic advancement.

Mr Faal said the 2020-2024 CSP identifies supporting infrastructure development and promoting social inclusion through agribusiness and skills development as key priority areas for Nigeria.

“These priorities have been selected to leverage Nigerias rich endowment of natural and human resources toward transforming the lives of its people.

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“It is in this context that the new CSP has been customized to support government efforts in confronting challenges and to foster long-term, socially inclusive development,” Mr Faal said.

Priority areas

Under the CSP, he said the Bank would deploy a combination of sovereign and non-sovereign financing instruments to support the two priority areas, including investment and institutional support projects.
Other areas of support would be on evidence based analytical work in numerous economic sectors, policy dialogue and provision of advisory services.

Special focus would be put on supporting the Nigerian private sector, in terms of financing and advisory services, and on Public-Private-Partnership (PPP) initiatives that enable innovative, long-term investment in energy, transport and water and sanitation.

The AfDB Strategy Paper is a product of participatory consultations with a range of key stakeholders, both state and non-state actors as well as bilateral and multilateral development partners.

The AfDB said the CSP is fully aligned with its 10-year strategy, the High 5 priorities and Nigerias own Economic Reform and Growth Plan (ERGP), as well as the global Sustainable Development Goals (SDGs).

As of December 2019, the Bank Groups active portfolio in Nigeria comprised 61 operations, with a total commitment of about $5 billion.
Of the total active operations, 29 were in the public sector, with a commitment of $2 billion (43%) and 32 non-sovereign operations with a total commitment of $3 billion, equivalent to 57% of the total portfolio.