Finance
IMF to Discuss Nigeria’s $3.4bn Loan Request
- IMF to Discuss Nigeria’s $3.4bn Loan Request
The International Monetary Fund (IMF) has said its executive board would delegate on the new loan request from Nigeria, Africa’s largest economy.
The Minister of Finance had disclosed on Tuesday that the nation approached the IMF for a credit facility to cushion the effects of the COVID-19 on the economy.
She said the Federal Government was looking to raise $6.9 billion from the World Bank, the International Monetary Fund and the African Development.
In her breakdown, the sum of $3.4 billion will comes from the International Monetary Fund, while $2.5 billion and $1 billion will be sourced from the World Bank and the African Development Bank.
“Nigeria has a contribution of $3.4bn with the IMF and we are entitled to draw up to the whole of that $3.4bn. We have in the first instance applied for that maximum amount,” she said on Monday in Abuja.
Ms Kristalina Georgieva, the Managing Director, IMF, has acknowledged the Federal Government’s request, saying “We are working hard to respond to this request so that a proposal can be considered by the IMF’s executive board as soon as possible.”
Ahmed had said on Tuesday that without a stimulus package the nation’s economy may contract by as much as 3.4 percent this year.
That was after Fitch Ratings downgraded the nation’s long-term foreign-currency issuer from B+ to B due to falling oil prices and weak foreign reserves.
Georgieva said, “Nigeria’s economy is being threatened by the twin shocks of the COVID-19 pandemic and the associated sharp fall in international oil prices.”
She added that “to support these efforts, Nigeria’s government has requested financial assistance under the Fund’s Rapid Financing Instrument.
“This emergency financing would allow the government to address additional and urgent balance of payment needs and support policies that would make it possible to direct funds for priority health expenditures and protect the most vulnerable people and firms.”