Fed Govt's economic reforms yielding results, says AfDB
Business
The economic reforms rolled out by President Bola Tinubu’s government since May 2023 have boosted the country’s economy, the Africa Development Bank (AfDB) has said.
According to its African Economic Outlook 2025 released at its ongoing Annual Meetings in Abidjan yesterday, services contributed three-quarters growth to Nigeria’s Gross Domestic Product (GDP).
As a show of appreciation, AfDB President, Dr. Akinwumi Adesina, commended President Tinubu for authorising a $500 million replenishment of the Nigeria Trust Fund (NTF), extending the facility for another 15 years.
Adesina noted the significance of Nigeria’s contribution to the Fund’s longevity and its developmental purpose across the continent.
“To President Bola Tinubu, for your support over the past two years, I am profoundly grateful. Thank you for graciously approving the replenishment of the Nigeria Trust Fund for another 15 years for $500 million,” Adesina said.
The AFDB report attributed 13 per cent to industry growth, driven by higher oil production, which rose 2.8 per cent to 1.56 million barrels per day (bpd) last year.
It said that agriculture production supported by competitive domestic prices contributed nine per cent to GDP growth.
“Demand was moderated by suppressed consumption due to higher prices. Market determined petrol prices increased 77 per cent and the Naira weakened 42 per cent during 2024.
“Both key underlying factors contributed to inflation, which stood at 33.2 per cent in 2024, up from 24.7 per cent in 2023.
“To dampen inflation pressures, the Central Bank of Nigeria (CBN) tightened the policy rate to 27.5 per cent,” it said.
The report said that fiscal deficit of 3.9 per cent of GDP, which was marginally lower than 4.0 per cent in 202, was largely driven by increased non-oil revenue.
“Public debt increased to 52.3 per cent of GDP in 2024 from 41.5 per cent in 2023,’’ it said
According to the report, this is driven by a weaker Naira and increased public borrowing.
It said that the current account surplus increased to 9.2 per cent of GDP in 2024 from 1.6 per cent of GDP in 2023 as higher import prices lowered imports.
The report said the financial services sector initiated recapitalisation to align with the trillion-dollar economy agenda, while financial stability improved.
It said non-performing to gross loans ratios fell to 4.1 per cent mid-2024 from 4.4 per cent in 2023.
The NTF was established in 1976 through an agreement between the Federal Government of Nigeria and the AfDB. Its creation reflected Nigeria’s commitment to advancing economic and social development across low-income countries within the African region.
The Fund operates as a self-sustaining revolving financing mechanism designed to assist low-income regional member countries whose development circumstances necessitate concessional funding.
Resources from the NTF are used to finance projects either jointly with the African Development Fund (ADF) and AfDB or as independent interventions across public and private sectors.
One of the defining features of the NTF is that it allocates funding to specific projects rather than earmarking funds for countries, setting it apart from the African Development Fund. This targeted approach allows for strategic deployment of resources to initiatives with high developmental impact, ranging from infrastructure and agriculture to education and health.
The Fund’s structure is anchored in a legal arrangement where assets are held and managed by a trustee on behalf of its beneficiaries, ensuring transparency, sustainability, and accountability in resource application.
Over the decades, the NTF has supported critical development efforts in energy, transport, water supply and sanitation, and institutional capacity-building in several countries. It has also provided supplementary loans to Bank Group-financed projects, enhancing implementation and expanding project scope.
President Tinubu’s renewed commitment to the Fund is viewed as a reaffirmation of Nigeria’s leadership role in fostering continental development and promoting inclusive growth across Africa.
The $500 million replenishment is expected to bolster the Fund’s capacity to support transformative initiatives in countries grappling with limited access to finance and high development needs.
Adesina also extended gratitude to African heads of state, governments, and institutions that have supported his leadership and the Bank’s mission over the past decade.
He said: “May God bless the African Union and all the Regional Economic Communities, the private sector, civil society, youth and women of Africa, multilateral and bilateral institutions, partner institutions, and media organizations who supported us along the way.
“Together, we collectively joined hands around the Baobab tree of Africa’s challenges and opportunities. Thank you all for believing in Africa. May Africa always thrive and shine, and may our light never grow dim.”
The AfDB Annual Meetings bring together leaders, policymakers, development partners, and stakeholders to discuss pressing economic and development issues facing Africa.
This year’s gathering comes at a time when many African economies are recovering from the twin impacts of the COVID-19 pandemic and global economic shocks, with an increasing call for homegrown solutions and intra-African solidarity.
