Nigeria Not Indebted to IMF, Says FG

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed

Obinna Chima

The federal government has clarified that Nigeria is not indebted to the International Monetary Fund (IMF) and hence should not have been among the 25 countries granted debt relief by the global body.

The clarification followed insinuation that the delay in the federal government securing financial support from IMF was because the country was indebted to the multilateral institution.

Responding to enquiries by THISDAY yesterday, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said Nigeria’s application for new IMF financing was under consideration and receiving attention.

Ahmed had last week said the country was seeking $3.4 billion from IMF as part of measures the government was taking to reflate the economy, due to the disruptions caused by COVID-19.

The fund on Tuesday approved immediate debt relief for 25 countries, most of them in Africa, but Nigeria was not on the list.
In addition, IMF said it was set to provide $11 billion to 32 countries in Africa that had requested for assistance in fighting the pandemic without disclosing the beneficiaries.

But Ahmed said: “It is true that Nigeria is not a beneficiary of the recent IMF debt relief for 25 countries. This is because as stated in the IMF Executive Board statement the relief provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months.

“Since Nigeria is not indebted to IMF, there is no outstanding debt obligation to be forgiven. Nigeria’s current financial position at IMF is public information on the IMF website.

“Nigeria’s application for new IMF financing is under consideration and receiving attention.”

According to her, the new application by the federal government is for financing under the IMF’s Rapid Financing Initiative (RFI).
She added that Nigeria was entitled to access up to 100 per cent of its quota under the RFI.

Nigeria’s financial position in IMF as of March 31, 2020, seen on the Washington-based institution’s website showed that the country has no outstanding purchases and loans with IMF.

Ahmed had said Nigeria would have to take tough measures as a result of the harmful impact of COVID-19 on the economy.
“So, we need to do things that are very radical, and very bold and very different and maybe, even unusual so that we don’t slip into a recession.

“It worries me that our economy is in crisis. It worries me that when we did an assessment, our own assessment is that we could go into a recession in 2020 and the numbers we have from the NBS (National Bureau of Statistics) is a -3-4 and that is very disturbing. The multilateral institutions placed us on a much higher number,” she stated.

The minister had explained that the collapsing demand for crude oil was giving Nigeria concern because of the projected crude oil price of $57 per barrel in the 2020 Budget had become unrealistic.

“Now, we have to work with an average of $30 per barrel. We also have to adjust the volume from 2.1 million barrels per day to 1.7 million barrels per day because the market is low,” she said.

IMF had on Wednesday advised Nigeria not to spare any resources in curbing the spread of COVID-19.

IMF’s Director, Africa Department, Mr. Abebe Selassie, had said the Nigerian economy was among those to be hard hit by the pandemic.

He urged the federal and state governments to roll out more fiscal measures to fight the virus, which has continued to spread in the country.

“In the near term, no resources should be spared to put the health crisis threat that Nigeria faces from the COVID-19 pandemic. So, we see scope for more supportive policies on the fiscal side.

“There is also scope for having an exchange rate policy framework that would be supportive of this fiscal stance. So, we look for those policies to be adopted to support Nigeria to put this crisis behind it,” he said.

IMF had on Tuesday predicted a negative Gross Domestic Product (GDP) of -3.4 per cent for Nigeria in 2020, due to the ongoing disruptions caused by the COVID-19 pandemic.