The AfDB loan will fetch an interest rate of 4.2% for 25
years with eight-year moratorium, Edun told reporters after a cabinet meeting
in the capital city, Abuja.
Nigeria's cabinet on Monday revised the country's 2024
budget upwards by 1.5 trillion naira to 27.5 trillion naira ($32.76 billion),
after increasing the oil price benchmark and lowering the naira exchange rate
assumption.
"(Federal Executive Council) approved a $1 billion
concessionary loan for general budget support and to be used to improve forex
availability in the country," Edun said.
"The $1 billion loan from AfDB is a budget support fund
for ongoing economic reforms. It is to support government programs ... in power
sector, social inclusion and the fiscal policy reforms as a whole sector policy
initiative."
The cabinet approved a limit of 2 trillion naira for use to
refinance expensive government debt and save on debt servicing cost, Edun said.
Nigeria has been spending the bulk of its revenue on debt service due to low
tax collection.
"The view is that there will be an opportunity to save
about 50 billion naira or more in debt servicing over time by giving back
expensive debt, refinancing it with cheaper funding," Edun said.
President Bola Tinubu has embarked on Nigeria's boldest
reforms in decades by scrapping a popular but costly subsidy on petrol and a
system of multiple exchange rates that had kept the currency artificially
strong, curbing trade and growth.
Tinubu is trying to rebuild Nigeria's economy and attract
investors to revive growth, which has been sluggish for almost a decade, tackle
a high debt burden, and lower double-digit inflation.