African Development Bank has approved $300 million and $50 million loans to First Bank of Nigeria and FSDH Merchant Bank Nigeria respectively to support import-export activity of local enterprises.
The AfDB disclosed this in its monthly newsletter signed by the Nigeria Country Field Office on Wednesday in Abuja.
The Bank stated that the two facilities were part of AfDB’s broader efforts to provide countercyclical support to the Nigerian economy at a time of falling commodity prices.
It said that the fall had caused shortages in foreign currency supply and led to unmet demand for trade finance instruments to support Nigeria’s ongoing economic transitions.
“The loans will help to address critical market demand for trade finance and dollar liquidity by supporting vital economic sectors.
“Such sectors include agri-business, chemicals, construction and engineering, food processing, manufacturing and non-traditional exports.
“It will foster financial sector development, enhance regional integration, contributing to increased government revenue generation at a time when the Nigerian economy is facing fiscal pressures and foreign currency liquidity challenges.
“The loans will also enhance support to domestic enterprises whose businesses are being hamstrung by shortages in dollar funding.”
AfDB said that if fully utilised, counting rollovers, the interventions were expected to facilitate about 2.5 billion dollars of export-import related activity in intermediate and finished goods, raw materials and equipment.
The bank said this would lend support to economic growth and tax generation over a 3.5-year period.