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Nigeria seeks $3.4 billion IMF facility to tackle coronavirus pandemic

April 6, 2020

 

 

Faced with a weak fiscal position, the Federal government has approached the International Monetary Fund (IMF) for a $3. 4 billion facility, in order to effectively tackle the COVID-19 pandemic.

 

The Minister of Finance Budget and National Planning, Mrs Zainab Ahmed, disclosed this at a press conference in Abuja, this afternoon (Monday), also announced a N500 billion COVID-19 stimulus package.

 

$3. 4 b IMF facility

 

She explained that the facility being sought was from the Drawing Right, meaning, it would come from Nigeria’s contribution to the IMF. Mrs Ahmed added that it would, therefore, come without IMF conditionalities and that the country was not entering into any formal programme with the Fund.

 

Her words, “We have also applied for funding from the International Monetary Fund’s COVID-19 Rapid Credit Facility to draw from our existing holdings with the World Bank Group / International Monetary Fund. “This loan will not be tied to any conditionalities.

 

Let me just state here and clarify explain that Nigeria does not intend to negotiate or enter into a formal programme with IMF at this time or in the foreseeable future.

 

“The COVID-19 Rapid Credit Facility is a right for every member country to draw up to limit of the amount that it has contributed and Nigeria has expressed its interest in that regard."

 

“We have about $3.4 billion with the IMF and we intend to withdraw the entire amount. The IMF has a provision that we can withdraw between 50 – 100 per cent. We are aware that 80 other countries have asked for similar facilities.”

 

In addition, Mrs Ahmed said that the federal government was in talks with other multilateral organizations such as the World Bank, the Islamic Development Bank and the African Development Bank, for concessionary loans to effectively fight the pandemic.

 

On the N500 billion, Mrs Ahmed said, “Mr President has approved the establishment of a N500 billion COVID-19 Crisis Intervention Fund.

 

“The establishment of this COVID-19 Crisis Intervention Fund will involve drawing much-needed cash resources from various Special Funds and Accounts, in consultation with and with the approval of the National Assembly.

 

“The N500 billion is proposed to be utilized to Upgrade healthcare facilities as earlier identified by the Presidential Task Force on COVID-19 and approved by Mr President; finance the Federal Government’s Interventions to support States in improving healthcare facilities; finance the creation of a Special Public Works Programme, and fund any additional interventions that may be approved by Mr President.”

 

She disclosed that the Federal Government had provided N102.5 billion to be available for direct interventions in the healthcare sector. According to her, “Of this sum, N6.5 billion has already been made available to the NCDC for critical expenditure.

 

The Federal Government remains committed to supporting the States in these difficult times, particularly those States that are currently battling with the COVID-19 Pandemic.

 

“Lagos State has already been provided N10 billion in emergency funding. As the situation in the FCT and other States at the forefront of our efforts unfolds, explicit criteria are to be agreed with the Federal Ministry of Health and the NCDC to determine when funds would be released to the affected States and the FCT. More funds are to be provided from the proposed COVID-19 Crisis Intervention Fund to address emerging and priority funding needs as these arise.”

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