IMF May Approve Nigeria’s $3.4 Billion Loan Today
The Executive Board of the International Monetary Fund may approve the $3 .4bn loan sought by Nigeria on Tuesday (today).
The Central Bank of Nigeria (CBN) may be asked to adjust the naira exchange rate to floating regime as a precondition for the International Monetary Fund (IMF) to approve Nigeria’s $3.4 billion emergency financing loan request.
The loan will allow Nigeria to address additional and urgent balance of payments needs and to direct funds to priority health expenditures.
Other loan requests are also before the African Development Bank (AfDB) and other multilateral institutions. When approved, the loans will be used to address the impact of the coronavirus on the economy.
The decision on whether the IMF will grant the $3.4 billion loan will be taken today when the Fund’s board meets.
At the weekend, the IMF said it would meet on April 28 to consider Nigeria’s request for $3.4 billion in emergency financing to combat the impact of the coronavirus. Nigeria, which is reeling from the twin hits of the oil price collapse and the new coronavirus pandemic, requested the emergency funding under the Fund’s Rapid Financing Instrument.
It is expected that the IMF Executive Board would approve the loan having already approved similar requests for several countries.
According to the IMF, about 102 countries applied for aid as a result of the COVID - 19 pandemic .
The IMF Managing Director , Kristalina Georgieva, had in a statement on April 7 said the organisation was working hard to respond to the request as soon as possible .
Georgieva noted , “Nigeria’ s economy is being threatened by the twin shocks of the COVID- 19 pandemic and the associated sharp fall in international oil prices . ”
The IMF boss also observed that the Federal Government had initiated a number of measures aimed at containing the spread of the virus and its impact.
The measures, according to Georgieva , include swift release of contingency funds to Nigeria Centre for Disease Control.
She added that the Nigerian government was working on an economic stimulus package that would help provide relief for households and businesses impacted by the downturn.
The organisation has also said Nigeria and other African countries need an estimated sum of $ 114 bn to fund the campaign against the outbreak of the coronavirus disease in the continent.
The Federal Government is hoping on the IMF credit, and similar loan requests from the World Bank and the African Development Bank , to cushion the effects of the pandemic on the country’ s economy .