Nigeria Nears Unprecedented $3.4bn Emergency Funding from IMF

The staff of the International Monetary Fund will recommend the approval of $3.4 billion in emergency funding to Nigeria when the lender’s executive board meets next Tuesday, according to two people with direct knowledge of the plan.

It could offer a significant boost to Nigeria, the oil dependent nation which arrived at the current Covid-19 imposed economic crisis the least prepared of its OPEC peers and its situation has been worsened by its socialist-tilted government which spends on what it shouldn’t (petrol and electricity subsidies) and fails to spend on the health of its people.

The loan, scheduled to be repaid in a maximum of five years, would be the largest allocation yet by the IMF to an African country to assist with the coronavirus pandemic.

The lender approved a disbursement of about $1 billion to Ghana earlier this month. The outbreak is reducing demand for and prices of Africa’s commodities, while domestic lockdowns have shuttered industries and trade.

Nigeria’s request for $3.4 billion will be considered on April 28, an IMF spokesperson said. A finance ministry spokesman declined to comment.

Hit by crashing oil prices and lockdowns, Nigeria requested the amount under the Rapid Financing Instrument, which offers funding without the strings of a full program, said the people, who asked not to be identified because the information is not yet public.

Nigeria also requested another $3.5 billion in total from the World Bank and the African Development Bank.

The oil producer’s economy could shrink the most in almost half a century this year after the collapse of the price of crude, which makes up more than haft of government revenues and 90% of exports.

The IMF will mobilize more than $18 billion to respond to more than 40 African countries who have requested assistance to battle the pandemic, Managing Director Kristalina Georgieva said last week.