The International Monetary Fund (IMF) will recommend the approval of $3.4 billion in emergency funding to Nigeria when the lender’s executive board meets next week.
Bloomberg, which stated this, quoting two people with direct knowledge of the plan, said the drawdown scheduled to be repaid in a maximum of five years, would be the largest allocation yet by the IMF to an African country to assist with the Coronavirus pandemic. The lender approved a disbursement of about $1 billion to Ghana earlier this month.
The outbreak was reducing demand for and prices of Africa’s commodities, while domestic lockdowns have shuttered industries and trade.
Nigeria’s request for $3.4 billion will be considered on April 28, an IMF spokesperson said, but a Finance Ministry spokesman declined to comment on the issue.
Hit by crashing oil prices and lockdowns, Nigeria requested the amount under the Rapid Financing Instrument, which offers funding without the strings of a full programme, said the people, who asked not to be identified because the information is not yet public. Nigeria also requested another $3.5 billion in total from the World Bank and the African Development Bank.
The oil producer’s economy could shrink the most in almost half a century this year after the collapse of the price of crude, which makes up more than haft of government revenues and 90 per cent of exports.
The IMF would mobilise more than $18 billion to respond to more than 40 African countries who have requested assistance to battle the pandemic, Managing Director, Kristalina Georgieva said last week.
The federal government recently clarified that Nigeria was not indebted to the IMF, a clarification it made because of insinuation that the delay in the federal government securing financial support from IMF was because the country was indebted to the multilateral institution.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had said Nigeria’s application for new IMF financing was under consideration and receiving attention.
Ahmed had explained: “It is true that Nigeria is not a beneficiary of the recent IMF debt relief for 25 countries. This is because as stated in the IMF Executive Board statement the relief provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months. Since Nigeria is not indebted to IMF, there is no outstanding debt obligation to be forgiven. Nigeria’s current financial position at IMF is public information on the IMF website. Nigeria’s application for new IMF financing is under consideration and receiving attention.”
She added that Nigeria was entitled to access up to 100 per cent of its quota under the IMF’s Rapid Financing Initiative (RFI).