Nigeria to source for over ₦2.67tr additional COVID-19 stimulus fund

The Federal Government will be sourcing for over ₦2.67trillion to fully execute the COVID- 19 stimulus.

This is aside the ₦500 billion already earmarked for the stimulus package.

Addressing journalists on the details of the COVID- 19 stimulus, Minister of Finance Zainab Ahmed, said Nigeria will draw down her facility with the International Monetary Fund (IMF) totalling $3.4 billion in addition to $2.5 from the World Bank, $1 billion from the African Development Bank and $150 million from the Stabilisation fund of the Nigeria Sovereign Investment Authority (NSIA).

The ₦2.67 trillion, she said, does not include what the government will access from the Islamic Development Bank (IDB) and dividends expected from Nigerian Liquified Natural Gas (NLNG).

According to Ahmed: “Nigeria has a contribution of $3.4 billion with the IMF and we are entitled to draw up to the whole of that $3.4 billion no less. We have in the first instance applied for that maximum amount, then in the process when we negotiate we might get the maximum amount or less.

“That is the amount of our contribution with the IMF and this is the provision that IMF has made for every member country that you can apply for between 50 to 100 per cent of your contribution to the IMF.”

This money from the IMF, she explained, “is a programme that has no conditions attached to IMF programmes and this is not an IMF programme. Up to date we were told that up to about 80 countries have applied to draw from their contributions to the IMF.”

Other sources of fund the government hopes to draw from to meet the challenges of the coronavirus, the minister said include a “request from the World Bank for $2.5 billion; from the African Development Bank (AfDB) $1billion.”

The request made to the IMF, World Bank, IDB, and the AfDB, she said, “are request for the nation both for the Federal Government as well as the state.

In order to address the emerging fiscal risks, as a result of the drop in the international oil prices and global outbreak of coronavirus (COVID-19), President Muhammadu Buhari has given a number of approvals.

He has approved the sum of US$150 million be withdrawn from the Nigeria Sovereign Investment Authority (NSIA) Stabilisation Fund to support the June 2020 Federation Accounts Allocation Committee (FAAC) disbursement.

The Stabilisation Fund, the Minister, said: “was created for such emergencies, and based on the fiscal assumptions underpinning the 2020 Appropriation Act, monthly FAAC disbursements to the federal and state governments were projected at N888.5 billion.”

She stated: “Our experience shows that monthly FAAC receipts must average at least N650 billion for the federal and state governments to meet their current obligations. Unfortunately, we project that monthly receipts may decline to below N400 billion, over the next three to six months.”

She also revealed that President Buhari has also approved that the Federal Ministry of Finance, Budget and National Planning should engage with the Central Bank of Nigeria (CBN) to agree on a debt and interest moratorium for states on federal government and CBN-funded loans, in order to create fiscal space for the states, given the projected shortfalls in FAAC allocations.”

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