IMF approves Nigeria’s emergency funding request

As reported by the Financial Street on Monday, the Executive Board of International Monetary Fund on Tuesday approved Nigeria’s request for $3.4bn loan.

Nigeria had requested earlier in April applied for an emergency financial assistance of the said sum which is made up of the country’s whole quota to the Fund under the Rapid Financing Instrument, to meet the urgent balance of payment needs arising from the outbreak of the coronavirus disease.

Deputy Managing Director and Acting Chair, Mr. Mitsuhiro Furusawa, stated, “The COVID-19 outbreak, magnified by the sharp fall in international oil prices and reduced global demand for oil products, is severely impacting the 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.”

While commending the countries immediate response to the crisis, Furusawa advised that Nigeria could focus on the medium-term macroeconomic stability and implement the Economic Recovery and Growth Plan reform proposals.

He also stated that more funding would be needed to shore up financing gaps, and called for an independent audit of the funds to ensure proper appropriation.

“The emergency financing under the RFI will provide the much-needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support government’s efforts and close the large financing gap.

“The implementation of proper governance arrangements – including through the publication and independent audit of crisis – is crucial to ensure emergency funds are used for their intended purposes,” Furusawa added.

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