Wale Edun, minister of finance and coordinating minister of the economy, says the federal executive council (FEC) has approved a $1 billion budget support loan from the African Development Bank (AfDB).
Edun spoke to state house correspondents at the end of the FEC meeting presided by President Bola Tinubu on Monday.
The minister said he presented memos on financing that got approved. Another approval received was the N2 trillion to his ministry to “bring down the rate of interest on the current outstanding”.
Edun said: “First of all, there was an inherited financing, an inherited loan processing, which was to do with the $100 million financing from African Development Bank and $15 million from the Canada-African Development Bank Climate Fund.”
“Essentially, it was processed before this administration came in and, so it has been inherited. Essentially, it is concessional borrowing, around 4.2 percent per annum by Abia State, through the federal government.
“So the funds are to be lent to Abia State and they are for waste management and rehabilitation of roads in Umuahia and Aba, in particular. That was approved.
“Secondly, there was financing of $1 billion, concessional financing, 25 years, eight years moratorium at about the same 4.2 percent per annum, which was approved by the African Development Bank for this administration.
“And really, it was in recognition of the macroeconomic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government.
“The reward, as far as the African Development Bank, a concessional financing organisation, was to provide $1 billion in general budget support.
“Finally, in order to keep working hard and maximising the ability of the government to use the markets and to take advantage of different situations and improve situations, the federal executive council approved a total limit of N2 trillion to be available for use by ministry of finance in order to go in and out of the market and essentially to, where possible, bring down the rate of interest on the current outstanding.
“So essentially, it will be refinancing and the view is that there will be an opportunity to save about N50 billion or more in debt servicing over time by giving back expensive debt refinancing with cheaper funding.”
Speaking further on the efforts of the presidential committee on tax reforms and fiscal policy, Edun said the group have been “working very well and very effectively, such that they are in a position to have even impacted the economy by coming up with initial reforms, as well as signposting the way forward in terms of very important targets”.
Edun said some economic measures by the committee, in the short term, are being contemplated and their report was well received by the president and approved by the council.