Nigeria may sign its Trust Fund (NTF) lending window at the African Development Bank (AfDB). To this effect, a formal agreement is to be signed between Nigeria and the African Development Bank on Thursday, 15th of May, according the Nigerian Finance Minister, Dr. Shamsudeen Usman at a media chat in Maputo on Tuesday.

The NTF is a special AfDB fund created in 1976 by agreement between the bank group and Federal Government. Its objective is to assist the development efforts of low-income Regional Member Countries (RMC) whose economic and social conditions and prospects require concessional financing.
The NTF became operational in April 1976 following approval of the agreement establishing the NTF by the Board of Governors. Its initial capital of US$80 million was replenished in 1981 with US$71 million. In April 2003, the AfDB Board of Governors considered and approved a number of proposals aimed at enhancing the effectiveness of the NTF.

hese proposals included: adjusting the interest rate for NTF loans from four per cent to a two to four per cent range, to increase concessionality; allocating 10 per cent of NTF yearly net income as contribution to the HIPC Trust Fund; appropriating NTF corpus resources to finance activities under the Technical Cooperation Agreement with the Bank Group to support programmes benefiting its RMCs; and introducing more flexibility in the investment of NTF resources, pending their use in financing. Usman said that conditions under the Fund operates will this time be reviewed. He refused to give details.

The Fund however had technical hitches, which had stopped lending from the window in the last five years. Currently there are no loan disbursements through the window.
He said that the Federal Government had agreed on a new 10-year term for the renewal and details of new method of its operations would be worked out by the government and the AfDB.
The minister said that the Federal Government was still interested in assisting other African countries and the renewal of the Fund was a demonstration of that commitment.

He said that Nigeria had written-off $10.4 million Liberia's debt to the NTF, which he said was part of total waivers of Liberia's debt to countries, the World Bank and the IMF. He said that the country had received commendations from the AfDB for its gesture. Usman said that there had been a steady decline in Nigeria's shareholding at the AfDB, which he attributed to the failure of the country to take up new issues of the AfDB in recent times. He said that the country would be more alert to the sustenance of its shareholding in the AfDB.

The minister said that many international banks were now more interested in investing in the country and that he had series of meetings with some of them at the AfDB yearly meeting.

Source: Guardian