$3.4Bn IMF Support: “We’ll Ensure Judicious Management of Funds” -Finance Ministry

Nigeria’s Minister for Finance, Budget, and National Planning, Mrs Zainab Ahmed, has assured that the massive emergency support of $3.4 billion will be judiciously managed to address the challenges posed by both the drastic fall in price of crude oil, and the COVID-19 pandemic.

She disclosed this on Thursday through the Special Adviser to the Minister on Media & Communications, Yunusa Tanko Abdullahi. She said: “We appreciate the IMF for its timely response meant to assist us mitigate the initial impact of the pandemic on human population. Nigeria will certainly make judicious use and prudent management of the facility. These are trying times and every kobo must count from this facility. We will also continue to welcome and commend the International Monetary Fund for its strong, and forward-looking commitment to support developing countries’ efforts to restart their economies.”The Minister for Finance, Budget, and National Planning During her virtual conference with IMF/World Bank Group.

It should be recalled that the Minister had engaged in virtual (via electronic means) meeting with other stakeholders of the World Bank Group and the IMF several weeks ago. She thereafter disclosed that the Bank was prepared to dedicate as much as $160 billion to Africa in the next 15 months, rising up to $350 billion by the year 2023.

Mr. Mitsuhiro Furusawa, the Deputy Managing Director and Acting Chair of the Fund, said, “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 balance of payment (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.”

This assurance by the minister is coming at a time that the masses are questioning if the various relief funds to the Federal Government will be put to uses that will have immediate impact on them as their conditions worsen and they hope for direct financial palliatives in form of money. Many have lamented their inability to stock up food to mitigate hunger while they struggle to stay home. There has been rumours of starvation and patients at public owned hospitals being abandoned (and many don’t have the means to afford medical bills at private hospitals.)

This certainly is a huge relief to the problems facing each African nation, and of course Nigeria. Considering the fact that debts keep rising and crude prices keep falling, it is a timely and welcome gesture. How this will have immediate effect on these complaints, time will tell. But while many are happy that the government is planning to relax some restrictions from next week, many also, are sceptical of the move, in fear that the COVID-19 cases could spike.

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