President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has disclosed ongoing discussions between the multilateral institution and the federal government to provide Nigeria with $1.76 billion in concessional financing to stabilise the economy

He emphasised the urgent need for Nigeria to secure long-term concessional financing from multilateral sources and also urged the West African country to shift towards an export-focused mindset in order to address the ongoing forex challenges.

Additionally, he pointed out that the bank has initiated several agricultural interventions aimed at yielding positive results this year to address food insecurity.

He said this in an interview with journalists in Lagos on Monday.

“This year we expect to approve with our board because we always go to our board of directors for approval, we plan to be able to do $1.76 billion of financing to Nigeria in different sectors, including considering a potential policy base operation of budget support to Nigeria.

“We are discussing with the Minister of Finance. That is part of a $1 billion budget support operation that will go into two tranches. Again, I will say it has to be approved by the board, but these are all the things that we are hoping to be able to do.”

Speaking on the foreign exchange challenges the country was facing, Adesina said: “There is a need to expand the access or the availability of forex.  When currencies weaken, what you have is that you don’t have enough forex to actually back your currency and therefore your currency depreciates.

“So, when you take a look at it, the approach that Nigeria has been following for decades now, I think it’s been the approach of basically allocating forex, so it’s an allocative position in times of a very restricted supply of forex. And that’s because Nigeria runs an import substitution strategy and that we have constantly been doing for a very long time.

“Nobody wins by playing defense. And the way to score is for Nigeria to have in my view, an export-oriented industrial manufacturing stance, that export-oriented industrial manufacturing stance.”

Speaking further, he said: “It is like a funnel, in which you bring in more forex, because you are actually developing your value chains that are export-oriented and earning a lot of forex, as opposed to a redistributive model of a small amount of forex.

“The country has to build industrial value chains in which it has a huge competitive advantage. It can be in agriculture, oil, it could be in gas, it could be creative industries, digital industries, or any kind of industry that allows you to have the platforms to be a manufacturing powerhouse. That is a long-term solution to the problem that you have today.”

Also speaking on the currency crisis, he said: “The only way in which countries like Nigeria and others can get more access to capital is to go to the Eurobond market, the global capital markets, which again becomes more expensive because the yield curves are very different.

“Right now, basically, the pricing becomes more expensive. So, I will say that there are probably about maybe three or four things that I will say. One, of course is to expand the access or the availability of forex when currencies weaken.”

He also noted that to tackle inflation, the focus should be on tackling the structural issues around agricultural output, noting that interventions taken by the AfDB would improve food supply this year.

He said: “As I speak to you today, we have approved $134 million for Nigeria to implement an emergency food production plan.

“Already, we have supported the cultivation of 118,000 hectares of wheat in Nigeria, already this season. We are also supporting by March, which we just entered, 150, 000 hectares of maize production.

“By the rainy season which comes up in May or June, we will support Nigeria to do 300,000 hectares of rice. We will also do 300,000 hectares of maize, 150,000 hectares of cassava and 50,000 hectares of soybean.

So, that means that by the end of March, Nigeria would get out an additional one million metric tons of wheat and by November, we’ll have an additional four million metric tons of rice, cassava, maize and soybeans.”