The board of the International Monetary Fund (IMF) has approved
the sum of $3.4 billion to support Nigeria’s COVID-19 fight.
The emergency financial assistance to Nigeria is the highest so
far to any member country.
The assistance, facilitated via the Rapid Financing Instrument
(RFI), will help limit the decline in Nigeria’s international
reserves “and provide financing to the budget for targeted and
temporary spending increases aimed at containing and mitigating the
economic impact of the pandemic and of the sharp fall in
international oil prices,” the IMF said.
Read the full statement below
IMF Executive Board Approves US$ 3.4
Billion in Emergency Support to Nigeria to address the COVID-19
Pandemic
- The IMF approved US$3.4 billion in emergency financial
assistance under the Rapid Financing Instrument to support the
authorities’ efforts in addressing the severe economic impact of
the COVID-19 shock and the sharp fall in oil prices. - The COVID-19 outbreak has magnified existing vulnerabilities,
leading to a historic contraction in real GDP growth and to large
external and fiscal financing needs. - Once the impact of the COVID-19 shock passes, the authorities’
commitment to medium-term macroeconomic stability remains crucial
to support the recovery and ensure debt remains sustainable.
The Executive Board of the International Monetary Fund (IMF)
approved Nigeria’s request for emergency financial assistance of
SDR 2,454.5 million (US$ 3.4 billion, 100 percent of quota) under
the Rapid Financing Instrument (RFI) to meet the urgent balance of
payment needs stemming from the outbreak of the COVID-19
pandemic.
The near-term economic impact of COVID-19 is expected to be
severe, while already high downside risks have increased.
Even before the COVID-19 outbreak, Nigeria’s economy was facing
headwinds from rising external vulnerabilities and falling per
capita GDP levels. The pandemic—along with the sharp fall in oil
prices—has magnified the vulnerabilities, leading to a historic
decline in growth and large financing needs.
The IMF financial support will help limit the decline in
international reserves and provide financing to the budget for
targeted and temporary spending increases aimed at containing and
mitigating the economic impact of the pandemic and of the sharp
fall in international oil prices.
The IMF remains closely engaged with the Nigerian authorities
and stands ready to provide policy advice and further support, as
needed.
Following the Executive Board’s discussion of Nigeria, Mr.
Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair,
issued the following statement:
“The COVID-19 outbreak—magnified by the sharp fall in
international oil prices and reduced global demand for oil
products—is severely impacting economic activity in Nigeria. These
shocks have created large external and financing needs for
2020. Additional declines in oil prices and more protracted
containment measures would seriously affect the real and
financial sectors and strain the country’s financing.
“The authorities’ immediate actions to respond to the crisis are
welcome. The short-term focus on fiscal accommodation would allow
for higher health spending and help alleviate the impact of
the crisis on households and businesses. Steps taken toward a more
unified and flexible exchange rate are also important and
unification of the exchange rate should be expedited.
“Once the COVID-19 crisis passes, the focus should remain on
medium-term macroeconomic stability, with revenue-based fiscal
consolidation essential to keep Nigeria’s debt sustainable and
create fiscal space for priority spending. Implementation of the
reform priorities under the Economic Recovery and Growth Plan,
particularly on power and governance, remains crucial to boost
growth over the medium term.
“The emergency financing under the RFI will provide much needed
liquidity support to respond to the urgent BOP needs. Additional
assistance from development partners will be required to support
the government’s efforts and close the large financing gap. The
implementation of proper governance arrangements—including through
the publication and independent audit of crisis-mitigating spending
and procurement processes—is crucial to ensure emergency funds are
used for their intended purposes.”
The board of the International Monetary Fund (IMF) has approved
the sum of $3.4 billion to support Nigeria’s COVID-19 fight.
The emergency financial assistance to Nigeria is the highest so
far to any member country.
The assistance, facilitated via the Rapid Financing Instrument
(RFI), will help limit the decline in Nigeria’s international
reserves “and provide financing to the budget for targeted and
temporary spending increases aimed at containing and mitigating the
economic impact of the pandemic and of the sharp fall in
international oil prices,” the IMF said.
Read the full statement below
IMF Executive Board Approves US$ 3.4
Billion in Emergency Support to Nigeria to address the COVID-19
Pandemic
- The IMF approved US$3.4 billion in emergency financial
assistance under the Rapid Financing Instrument to support the
authorities’ efforts in addressing the severe economic impact of
the COVID-19 shock and the sharp fall in oil prices. - The COVID-19 outbreak has magnified existing vulnerabilities,
leading to a historic contraction in real GDP growth and to large
external and fiscal financing needs. - Once the impact of the COVID-19 shock passes, the authorities’
commitment to medium-term macroeconomic stability remains crucial
to support the recovery and ensure debt remains sustainable.
The Executive Board of the International Monetary Fund (IMF)
approved Nigeria’s request for emergency financial assistance of
SDR 2,454.5 million (US$ 3.4 billion, 100 percent of quota) under
the Rapid Financing Instrument (RFI) to meet the urgent balance of
payment needs stemming from the outbreak of the COVID-19
pandemic.
The near-term economic impact of COVID-19 is expected to be
severe, while already high downside risks have increased.
Even before the COVID-19 outbreak, Nigeria’s economy was facing
headwinds from rising external vulnerabilities and falling per
capita GDP levels. The pandemic—along with the sharp fall in oil
prices—has magnified the vulnerabilities, leading to a historic
decline in growth and large financing needs.
The IMF financial support will help limit the decline in
international reserves and provide financing to the budget for
targeted and temporary spending increases aimed at containing and
mitigating the economic impact of the pandemic and of the sharp
fall in international oil prices.
The IMF remains closely engaged with the Nigerian authorities
and stands ready to provide policy advice and further support, as
needed.
Following the Executive Board’s discussion of Nigeria, Mr.
Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair,
issued the following statement:
“The COVID-19 outbreak—magnified by the sharp fall in
international oil prices and reduced global demand for oil
products—is severely impacting economic activity in Nigeria. These
shocks have created large external and financing needs for
2020. Additional declines in oil prices and more protracted
containment measures would seriously affect the real and
financial sectors and strain the country’s financing.
“The authorities’ immediate actions to respond to the crisis are
welcome. The short-term focus on fiscal accommodation would allow
for higher health spending and help alleviate the impact of
the crisis on households and businesses. Steps taken toward a more
unified and flexible exchange rate are also important and
unification of the exchange rate should be expedited.
“Once the COVID-19 crisis passes, the focus should remain on
medium-term macroeconomic stability, with revenue-based fiscal
consolidation essential to keep Nigeria’s debt sustainable and
create fiscal space for priority spending. Implementation of the
reform priorities under the Economic Recovery and Growth Plan,
particularly on power and governance, remains crucial to boost
growth over the medium term.
“The emergency financing under the RFI will provide much needed
liquidity support to respond to the urgent BOP needs. Additional
assistance from development partners will be required to support
the government’s efforts and close the large financing gap. The
implementation of proper governance arrangements—including through
the publication and independent audit of crisis-mitigating spending
and procurement processes—is crucial to ensure emergency funds are
used for their intended purposes.”