The executive board of the International Monetary Fund (IMF) have approved $3.4 billion in emergency financial assistance for Nigeria. The loan is to support the oil exporter’s response to the coronavirus pandemic.
The IMF has said it remains closely engaged with Nigerian authorities and is ready to provide policy advice and further support as needed.
The IMF has said the coronavirus outbreak and sharp fall in oil prices have magnified headwinds in the Nigerian economy. This has triggered a historic decline in growth and large financing needs.
Once the coronavirus crisis passes, the focus should remain on medium-term macroeconomic stability. Revenue-based fiscal consolidation is essential to keep Nigeria’s debt sustainable and create fiscal space for priority spending.
The funds will help Nigeria limit its decline in international reserves and finance temporary spending hikes to contain the pandemic. It will also mitigate its economic impact as well that of falling oil prices.
IMF Managing Director Kristalina Georgieva said on Monday she expected the fund to provide Nigeria with significant emergency financing by the end of April.
In a statement, Mitsuhiro Furusawa, IMF deputy managing director, said additional declines in oil prices and more protracted containment measures would seriously affect the country’s economy and strain its financing.
He welcomed Nigeria’s immediate actions to respond to the crisis, including steps to help households and businesses, and move toward a more unified and flexible exchange rate.
Furusawa said Nigeria would need additional assistance from development partners to close the large financing gap. Proper governance arrangements and independent audits is also needed to ensure emergency funds are used as intended.
Nigeria currently has over 1,700 of the coronavirus according to the Nigeria Centre for Disease Control (NCDC).