How the IMF wants Nigeria to spend the approved $3.4bn emergency bailout

The Board of the International Monetary Fund, IMF on Tuesday, April 28 approved a $3.4 billion emergency financial assistance to Nigeria under its Rapid Financing Instrument. The fund which is the largest amount it has allocated to a member country so far in the fight against COVID-19 is meant to assist Nigeria in tackling economic challenges caused by the pandemic and falling oil prices.

Nigeria's request for the emergency bailout was submitted to IMF earlier this month by the Minister of Finance, Zainab Ahmed to forestall the decline in Nigeria's international reserves. IMF acknowledged the request and revealed that it will be considered on April 28.

Following the approval of the fund, the IMF has advised Nigeria to focus on higher health spending and providing palliative for households and businesses.

"The short-term focus on fiscal accommodation would allow for higher health spending and help alleviate the impact of the crisis on households and businesses," Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair of IMF said.

Out of a total of 36 states and the Federal Capital Territory, Nigeria only have 15 COVID-19 test centres with another two in the works. A few days ago, the Director-General of the Nigeria Centre for Disease Control (NCDC), Dr. Chikwe Ihekweazu tweeted about the shortage of COVID-19 test kits in the country.

The IMF while praising the government's immediate response to the crisis, believes that it should pay more attention to resolving these problems. It also added that Nigeria should take steps to unify its exchange rate as quickly as possible.

With the shortfall in Nigeria's revenue projection for the 2020 budget due to the sharp fall in oil prices and global lockdown, the country has been seeking funds to bridge the revenue gap.

According to Finance Minister Zainab Ahmed, Nigeria is currently expecting an additional loan of $3.5 billion from the World Bank and the African Development Bank.

The Senate on Tuesday approved an N850 billion fresh domestic loan request from President Muhammadu Buhari.

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