President Muhammadu Buhari has approved the withdrawal of $150m from the Sovereign Wealth Fund to support the fight against the coronavirus disease.
The Nigeria Sovereign Investment Authority is an establishment that manages the Nigeria SWF, into which the surplus income produced from Nigeria’s excess oil reserves is deposited. This fund was founded to manage and invest these funds on behalf of the government of Nigeria.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed. disclosed this in Abuja on Monday at a news conference on the fiscal stimulus measures, in response to the COVID-19 pandemic and oil prices fiscal shock.
Her words, “President Buhari has also approved that the Federal Ministry of Finance, Budget, and National Planning should engage with the Central Bank of Nigeria to agree on a Debt and Interest Moratorium for states on Federal Government and Central Bank of Nigeria-funded loans, to create fiscal space for the states; given the projected shortfalls in Federation Account Allocation Committee allocations.
“Accordingly, once the monthly average FAAC receipts fall below a specific threshold, interest and capital payments by States shall be suspended till monthly average FAAC receipts exceed the threshold.”
The details of the moratorium will be expeditiously worked out to submit the final proposals for the president’s guidance and final approvals, she added.
The intervention, Financial Street gathered, is vital to create fiscal space for the states, as they deal with the health and economic impact of COVID-19.
“States will also be encouraged to explore similar arrangements for their outstanding debts to commercial banks,” she explained.