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  • IMF calls for more fiscal support to fight COVID-19 in Nigeria

    IMF calls for more fiscal support to fight COVID-19 in Nigeria

    The International Monetary Fund, IMF, has called on the Nigerian government to roll out more fiscal support to fight the COVID-19 pandemic.
    Director, Africa, IMF Africa Department, Abebe Aemro Selassie, made this call during a press briefing to unveil the IMF Regional Economic Outlook for Sub Saharan Africa, at the ongoing World Bank/IMF Spring Meeting, Washington, United States.
    He noted that while the medium term focus for Nigerian government is revenue mobilisation, the immediate focus now should be how to deploy resources to combat the COVID-19 pandemic.
    He said: “In the near term, no amount of resources should be spent in putting behind the health crises that Nigeria faces from COVID-19 pandemic. So we see scope for more support of policies. “In the fiscal side, Nigeria has requested for more support under the Rapid Financing Instrument.
    This is a quick dispensing resource that government can use to strengthen health spending, to provide social support to people. “There is also scope for having the monetary/exchange rate policy framework that will be supportive of the fiscal stance. So we look forward to those policies to be adopted to support Nigeria put this crisis behind it.”
  • COVID-19: IMF calls for multilateral cooperation on medicine, essential supplies

    COVID-19: IMF calls for multilateral cooperation on medicine, essential supplies

    The International Monetary Fund (IMF) has called for multilateral cooperation on medicines and other essential supplies to help tame the COVID-19 pandemic.

    The IMF made the call in its April 2020 World Economic Outlook released on Tuesday.

    The IMF explained that addressing the coronavirus pandemic was therefore required significant multilateral cooperation, including avoiding trade restrictions particularly on medicines and other essential supplies with a view to help financially constrained countries with limited health care capacity.

    It stated that such cooperation would help by providing such countries equipment and medical expertise financed through grants and zero-interest emergency loans.

    “Countries confronting the twin crises of health and external funding shocks, for example, those reliant on external financing, or commodity exporters dealing with the plunge in commodity prices may additionally need bilateral or multilateral assistance to ensure that health care spending is not compromised in their difficult adjustment process.

    “The IMF, with one trillion dollars in available resources, is actively supporting vulnerable countries through various lending facilities.

    “The recent doubling of access limits of the IMF’s emergency financing facilities will allow the IMF to meet an expected demand of 100 billion dollars in emergency financing, provided through the Rapid Credit Facility and the Rapid Financing Instrument, of which the former is only for low-income countries.

    “The Catastrophe Containment and Relief Trust can currently provide about 500 million dollars in grant-based debt service relief, including the recent 185 million dollars pledge by the UK and 100 million dollars provided by Japan as immediately available resources.

    “Official bilateral creditors have been called upon by the IMF managing director and the World Bank Group president to suspend debt repayment from International Development Association countries that is, those with gross national income per capita below 1,175 dollars in 2020 that request forbearance.

    “This would help with their immediate liquidity needs to address the challenges of the pandemic. Policies for the Recovery Phase Once the pandemic abates and containment measures are lifted, the policy focus will need to shift to rapidly moving to recovery, while scaling back special targeted measures deployed during the shutdown and ensuring debt overhangs do not weigh on economic activity.

    “This will require efforts at the national level and continued strong multilateral cooperation. There is still substantial uncertainty on how long it will take for economic activity to normalise and the policy challenges will be much more severe in a scenario with more protracted dislocation from the pandemic” it explained.

    The report indicated that securing a swift recovery, the lifting of containment measures was likely to be gradual, and even after containment measures were unwounded, economic activity might take a while to normalise.

    It added that uncertainty about contagion could lead to persistent voluntary social distancing and subdued consumer demand for services and firms might only slowly start hiring workers and expanding payroll. (NAN)

  • IMF board to meet on Nigeria’s $3.4bn loan request

    IMF board to meet on Nigeria’s $3.4bn loan request

    The International Monetary Fund executive board would soon meet over a fresh $3.4bn loan request from Nigeria.

    In a statement issued acknowledging the request, IMF Managing Director, Kristalina Georgieva, said the lender is working hard to respond to this request so that a proposal can be considered by the IMF’s executive board.

    The Federal Government is banking 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 economy.

    Nigeria’s economy is being threatened by the twin shocks of the COVID-19 pandemic and the associated sharp fall in international oil prices.

  • COVID-19: Nigeria seeks $3.4 billion loan from IMF

    COVID-19: Nigeria seeks $3.4 billion loan from IMF

    Nigeria has applied to the International Monetary Fund for a rapid credit loan of 3.4 billion US dollars as part of measures to cushion the effect of COVID-19 in the country.

    The Minister of Finance and Chairman, Special Ministerial Task Force on COVID-19, Zainab Ahmed, stated this at a news conference in Abuja.

    READ ALSO: [BREAKING] COVID-19: Lagos Discharges Two Female Patients After Testing Negative

    The loan is one of the measures being taken by the government to shore up the economy from the ravaging pandemic, especially with the steady fall in the price of crude in the international market.

    Mrs. Ahmed says the loan being sought from thr IMF is a pre-determined fund with no conditions attached.

    She says the requested loan is Nigeria’s contribution to the IMF so far.

    She says 150 million dollars will also be withdrawn from the Stabilization Fund to support dwindling monthly allocations to federal and state governments.

    The country is also expecting interventions from the World Bank and the Africa Development Bank as part of measures to take the pain of lockdown off the people.

    About 150 trucks of foreign rice seized by the Nigeria Customs Service will also be shared for the downtrodden to ease their burden.

  • 2.9% economic growth projection achievable in spite IMF’s position– BMO

    2.9% economic growth projection achievable in spite IMF’s position– BMO

    The Buhari Media Organisation (BMO) says the 2.9 per cent economic growth projection by the Federal Government for 2020 is achievable in spite of downward projection by the International Monetary Fund (IMF).

    A statement signed by its Chairman, Niyi Akinsiju and Secretary Cassidy Madueke in Abuja, said the IMF projection would be proven wrong.

    It disclosed that IMF position was arrived at after concluding its Article IV consultation with Nigeria.

    The BMO said the IMF downward growth projection for Nigeria from its initial 2.5 per cent to 2.0 per cent was off the mark.

    “They factored in obvious indicators that speak to weaknesses in terms of earnings, revenues and global trends fueled by the Coronavirus epidemic, which may indirectly affect Nigeria because of its impact on crude oil price that has hit economies around the globe.

    “It is a known fact that before President Buhari took over in 2015, Nigeria was a mono-economy with its budget mainly based on the price of crude oil at the international market.

    “Nigeria is in the process of active diversification. We have over the past four years commenced the process of looking inward and that is slowly but gradually taking our economy away from being foreign dependent.

    “The IMF may have forgotten that Nigeria is diversifying its economy, thanks to Buhari’s foresight that it would be suicidal to rely entirely on revenue from oil to generate funds to bankroll the developmental programmes of government.

    “This informed his decision to tow the path of economic diversification with focus on the development of agriculture, solid minerals, science and technology, manufacturing and Information Communication Technology (ICT).’’

    The organisation said the Central Bank of Nigeria (CBN) which was the monetary policy authority of the nation had also been proactive in this new thinking.

    It disclosed that the apex bank had raised Loan-to-Deposit Ratio (LDR) of banks from 60 to 65 per cent, principally to create more funds for credit to existing or new businesses.

    The organisation noted that the CBN’s LDR had ensured that more than two trillion Naira credit was created over the past six months, while businesses were being funded and capacity to produce had increased leading to rise in job creation.

    The BMO said that this would of course impact positively on the country’s GDP.

    According to the organisation, the Finance Act is also changing the economic environment, either in terms of growing new small and medium scale enterprises through tax exemption for companies that have less than N25 million annual turnover.

    “That is huge and it enhances investment for development.

    “Nigeria has shown progress, and considering the current policies’ deployments by the Federal Government, our GDP growth rate would increase and also improve our GDP to population growth ratio.

    “A number of legacy projects like Lagos-Ibadan expressway, Kashimbila Dam and hydro power project, Dadin Kowa dam are scheduled to be concluded and commissioned before the end of 2020. Lagos-Ibadan rail line will be operational by the beginning of the second quarter of this year.

    “All these will also have multiplier effects on the economy. We are moving away from being a foreign dependent economy by domesticating the capacity of our own economy which is important for growth.’’ (NAN)