Succour appears to be on Nigeria’s way as the managing director of the International Monetary Fund (IMF), has disclosed that the fund considering a $3.4 billion emergency bailout for Nigeria to help mitigate the impact of the COVID-19 pandemic on the Nigerian economy.
Recall that the Minister of Finance, Zainab Ahmed had earlier confirmed the country had approached the IMF and other multi-lateral institutions for a $6.9 billion loan as it grapples with dwindling government revenues and economic uncertainty following the crash in oil prices and the COVID-19 pandemic.
Georgieva confirmed in a statement that they were considering an “emergency financing” for Africa’s largest economy.
“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,” IMF MD said.
In a statement earlier in March, the IMF and the World Bank had shown concern and preparedness to assist member countries deal with the challenges posed by the outbreak of Coronavirus (COVID-19).
They also promised to provide bailout funding to emerging market economies like Nigeria. Nigeria has not received any bailout from the IMF since it ushered in democracy in 1999.
“The IMF and the World Bank Group stand ready to help our member countries address the human tragedy and economic challenge posed by the COVID-19 virus. We have engaged actively with international institutions and country authorities, with special attention to poor countries where health systems are the weakest and people are most vulnerable.
“We will use our available instruments to the fullest extent possible, including emergency financing, policy advice, and technical assistance. In particular, we have rapid financing facilities that, collectively, can help countries respond to a wide range of needs. The strengthening of country health surveillance and response systems is crucial to contain the spread of this and any future outbreaks.”
Nigeria is expected to use the funds to plug its huge revenue gap following the crash in oil prices and its inability to fund a huge part of its 2020 budget. Nigeria has also asked for a freeze in debt service to free up cash urgently needed to put the economy back on track.
The government announced it was considering several stimulus packages as it aims to shore up confidence in the markets. The Central Bank of Nigeria and the banker’s committee have already committed to a N3.5 trillion debt finance and refinancing package for the private sector.
On Tuesday the federal government announced it was going ahead with its Eurobond loans while also seeking debt reliefs. The IMF and the World Bank Group have also urged all bilateral creditors to suspend debt payment by Nigeria and other 75 International Development Association member countries that have requested for it.