The International Monetary Fund said on Tuesday its executive board approved $3.4 billion in emergency financial assistance for Nigeria to support the oil exporter’s response to the coronavirus pandemic.
The global lender said it remained closely engaged with Nigerian authorities and was ready to provide policy advice and further support as needed.
The outbreak and sharp fall in oil prices have magnified headwinds in the Nigerian economy, triggering a historic decline in growth and large financing needs, the IMF said.
The funds will help Nigeria limit its decline in international reserves and finance temporary spending hikes to contain the pandemic and mitigate its economic impact as well that of falling oil prices.
IMF Managing Director Kristalina Georgieva said on Monday she expected the fund to provide Nigeria with significant emergency financing by the end of April.
In a statement, Mitsuhiro Furusawa, IMF deputy managing director, said additional declines in oil prices and more protracted containment measures would seriously affect the country’s economy and strain its financing.
He welcomed Nigeria’s immediate actions to respond to the crisis, including steps to help households and businesses, and move toward a more unified and flexible exchange rate.
“Once the COVID-19 crisis passes, the focus should remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to keep Nigeria’s debt sustainable and create fiscal space for priority spending,” he said.
Furusawa said Nigeria would need additional assistance from development partners to close the large financing gap, and underscored the importance of proper governance arrangements and independent audits to ensure emergency funds are used as intended.