By Dipo Olowookere
The sum of $350 million loan has been approved by the African Development Bank (AfDB) to two banks operating in Nigeria.
The two financial institutions, First Bank of Nigeria and FSDH Merchant Bank Nigeria received $300 million and $50 million respectively to support import-export activity of local enterprises.
In its monthly newsletter, which was seen by Business Post, the AfDB disclosed that the loan facilities were part of its broader efforts to provide counter-cyclical support to the Nigerian economy at a time of falling commodity prices.
In the newsletter signed by the Nigeria Country Field Office on Wednesday in Abuja, the AfDB said, “The facilities will support local enterprises involved in import-export activity.”
The continental bank stressed 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.
It further said, “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.”