On an official visit to Nigeria, Akinwumi Adesina, the President of African Development Bank said his institution and the federal government of nigeria have found an agreement for a $1 billion loan. The transaction which will be finalized next month has a concessional interest rate of 1.2% for a 40-year maturity period.

Amid global oil price slump, the federal government of Africa’s most populated nation records a huge public deficit which prevents it from reviving growth and meet its commitments related to budgetary investments. The nation has, in order to correct this, seek out external support and plans to issue a $1 billion Eurobond, in addition to other external loans amounting to $4 billion.

Shares of Nigeria’s benchmark bond, which has a coupon rate of 16.39% and matures in 2022, currently trade at 106% of their face value. However, comparing to last year’s level, this year’s are lower than in October 2015.

“Times are hard in Nigeria but I want to assure you that Nigeria does not have debt crisis but revenue challenge,” Adesina said.

Idriss Linge