The Executive Board of International Monetary Fund (IMF) on Tuesday approved $3.4 billion in emergency financial assistance to support Nigeria in addressing the economic impact of COVID-19 and the sharp fall in oil prices.
The IMF said in a statement that the support, under the Rapid Financing Instrument, would help limit the decline in international reserves and provide financing to the budget.
The statement read: “The Executive Board of the International Monetary Fund (IMF) approved Nigeria’s request for emergency financial assistance of SDR 2,454.5 million ($ 3.4 billion, 100 percent of quota) under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.”
It said the near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased.
“Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels.
“The pandemic, along with the sharp fall in oil prices, has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs.
“The IMF financial support will help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending increases, aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices.
“The IMF remains closely engaged with the Nigerian authorities and stands ready to provide policy advice and further support, as needed,” it added.