The Federal Government of Nigeria is planning to borrow $6.9 billion dollars (N2.53 trillion) from World Bank, International Monetary Fund (IMF), and African Development Bank to arrest the spread of the coronavirus as is set to cripple the Nigerian economy.
This money excludes the recent N500 billion COVID-19 crisis interventions being approved by President Buhari.
The Minister of Finance, Budget and Planning, Zainab Ahmed revealed this in Abuja on Monday while briefing pressmen on the planned government fiscal stimulus measure to address the COVID-19 effect as well as to argue the crude oil price fiscal shock.
It was revealed that the Nigerian government was having only $3.4 billion left with the IMF and the FG was planning to empty the account through the IMF’s COVID-19 Rapid Credit Facility Window.
The Minister explained that “This drawing will not be tied to any conditionality. However, it is important to clarify that Nigeria does not intend to negotiate or enter into a formal programme with the International Monetary Fund at this time or in the foreseeable future,”
Meanwhile, $2.5bn concessional loan would be taken from the World Bank and additional $1billion concessional loan would be sought from the African Development Bank, saying all these monies would be channelled into funding the year 2020 budget.
Ahmed further explained that $1bn from the World Bank would go the state governments while $1.5bn would be utilised by the Federal Government.
According to the Minister, Nigeria has so far contributed N$3.4bn and we are entitled to take all, initially, we sought to take the maximum amount.
In the process, we would negotiate and get the maximum amount or less.
This is the option the IMF has offered all member countries she said.
She added the Minimum time Nigeria could access the fund at the IMF was six weeks, however, it could take up to two months to get a loan from the World Bank and the ADB.
She disclosed based on experience, monthly average FAAC receipt go for an average of N650 billion for both federal and states to meet their financial obligation.
Meanwhile, the decline in revenue coupled with the fall in the crude oil price, the Minister noted that based on the fiscal assumptions, supporting the year 2020 budget, “monthly FAAC disbursement accrue for both Federal and state government were projected at N888.5billion.
But due to current realities on the ground, FAAC monthly disbursement has declined in recent months to N716.3bn in January and N47.4bn in February in February.