Earlier today, Tuesday 28th April 2020, The International Monetary Fund (IMF), approved (IMF loan to Nigeria) US$3.4 billion emergency financial assistance for Nigeria to fight coronavirus.
“This (IMF loan to Nigeria) was approved by the Executive Board under the Rapid Financing Instrument (RFI).
The IMF has explained that COVID-19’s short-term economic impact is expected to be severe while high downside risks have already increased.
It noted that even prior to the COVID-19 outbreak, Nigeria’s economy faced headwinds from rising external vulnerabilities and falling GDP levels per capital.
The world body added that the pandemic – along with the sharp drop in oil prices – has magnified the vulnerabilities, leading to a historic decline in growth and large needs for finance.
The IMF stated that it remains closely involved with the Nigerian authorities and is prepared to provide policy advice and further support, as necessary.
Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, said in a statement: “The outbreak of COVID-19 – magnified by the sharp fall in international oil prices and reduced global demand for petroleum products – has a serious impact on Nigeria’s economic activities.
“These shocks created significant external and financing needs by 2020. Additional declines in oil prices and more prolonged containment measures would seriously impact the real and financial sectors and undermine financing for the country.
“Immediate actions by the authorities to respond to the crisis are welcome.
The short-term focus on fiscal accommodation would allow for higher health spending and help alleviate households and businesses from the impact of the crisis. Steps toward a more unified and flexible exchange rate are also important, and accelerating the unification of the exchange rate.
“Once the COVID-19 crisis has passed, the focus will remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to maintaining Nigeria’s debt and creating fiscal space for priority spending. Implementation of the Economic Recovery and Growth Plan reform priorities, especially on power and governance, remains crucial to stimulating growth in the medium term.