The African Development Bank (AfDB) has called off a loan to Nigeria that would have helped fund the country’s budget.
It has instead redirected the money to specific projects, a vice president at the lender said according to Reuters.
The AfDB had been in talks with Nigeria for around a year to release the second, $400 million tranche of a $1 billion loan to shore up its budget for 2017, as the government tried to reinvigorate its stagnant economy with heavy spending.
But Nigeria has not met the terms of the international lenders, which also included the World Bank, to enact various reforms, including allowing its currency, the naira, to float freely on the foreign exchange market.
Rather than loan Nigeria money to fund its budget, the African Development Bank is likely to take at least some of that money and “put it directly into projects,” Amadou Hott, African Development Bank vice-president for power, energy, climate change and green growth, told Reuters in an interview during a Nordic-African business conference in Oslo.
Because prices for oil, on which Nigeria’s government relies for about two-thirds of its revenues, have risen and the naira-dollar exchange rate has improved, the country is relying less than expected on external borrowing, Hott said.