The African Development Bank (AfDB) has approved $300 million and $50 million trade finance loans to First Bank of Nigeria and FSDH Merchant Bank Nigeria to support local enterprises involved in import-export activity.
The AfDB disclosed this in its monthly newsletter signed by the Nigeria Country Field Office, on Wednesday in Abuja.
The publication stated that the two facilities were part of the 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 has led to unmet demand for trade finance instruments to support Nigeria’s on-going economic transitions.
“The facilities will support local enterprises involved in import-export activity
“The loans will help address critical market demand for trade finance and dollar liquidity by supporting vital economic sectors such as agri-business, chemicals, construction, 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 enhance support to domestic enterprises whose businesses are being hamstrung by shortages in dollar funding,’’publication stated.
It said that if fully utilised, counting rollovers, the interventions were expected to facilitate about 2.5 billion dollars of export-import related activity.
Specially in intermediate and finished goods, raw materials and equipment to support economic growth and tax generation over a 3.5 year period.