The International Monetary Fund (IMF) has approved an emergency facility of $3.4 billion for Nigeria. The board of the IMF met on Tuesday to approve Nigeria’s request for emergency funding.
The loan is the highest amount approved for an African nation and represents the total special drawing rights Nigeria holds with the IMF.
“The 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 said in a statement.
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Mitsuhiro Furusawa, acting Chairperson of the IMF board commended Nigeria’s response to the coronavirus pandemic.
“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,” he said.
“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.”
“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 IMF said it stands ready to “provide policy advice and further support as needed”