- AfDB to raise total credit to Nigeria to more than $8 billion
The African Development Bank AfDB plans to increase its loans to Nigeria by more than $2 billion next year with investments in energy, infrastructure and agriculture, its President Akinwumi Adesina said.
The AfDB forecasts Nigeria’s economy will grow 2.1 percent this year as the output of and the price of oil, its main export, recover. The country depends on crude exports for two-thirds of government revenue and most of its foreign income. Brent crude, which compares with Nigeria’s export grades, has gained 26 percent in the past year, helping the recovery. It traded at $69.87 a barrel as of 5:03 p.m. in London.
Nigeria remains vulnerable to oil price shocks because of its dependence on the commodity. As prices continue to rally, the government of Africa’s biggest economy needs to invest more in infrastructure and boost funding to non-oil industries, which account for about 90 percent of gross domestic product, Adesina said.
“Oil only accounts for a small fraction of GDP so the key is to fund the non-oil sector,” Adesina said.
Agriculture is another sector the government is trying to expand. The AfDB plans to help set up “staple crop processing zones” and create agribusiness clusters across the country to curb harvest losses of as much as 70 percent for some crops, Adesina said.
“These zones will change our rural economy,” he said. “You will be able to create markets for farmers and reduce massive post-harvest losses. You will change the structure of agriculture itself because people will see it as a business as opposed to a subsistence activity.”