FG Discloses Plan to Borrow $6.9bn to Boost Economy

borrow $22.7bn

By Adedapo Adesanya

As part of measures to lessen the effect of the global coronavirus pandemic on the local economy, the federal government has disclosed plans to borrow the sum of $6.9 billion.

The planned loan facilities will be got from the World Bank, the International Monetary Fund (IMF), and the African Development Bank (AfDB).

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, made this disclosure on Monday in Abuja during a media briefing on the fiscal policy measures to tackle the impact of the COVID-19 pandemic on the economy.

Explaining the reason for the loan, Mrs Ahmed noted that the amount, when approved, will help finance the 2020 national budget which was affected by current realities.

Most economies were hit by the coronavirus pandemic which grounded activities to a halt in most sectors, as government and work places were disrupted, further telling on economic activities.

And as an oil dependent nation, the country also felt the impact of a drop in global crude prices which led to a review of the budget last month.

According to the minister, the $6.9 billion will see $3.4 billion borrowed from the IMF, $2.5 billion from the World Bank, while the remaining $1 billion will be sourced from the AfDB.

Giving a further breakdown of the World Bank facility of $2.5 billion, Mrs Ahmed noted that the sum of $1.5 billion would go to the federal government, while the balance of $1 billion would go to the 36 state governments.

The funds, according to the finance minister, is expected to come into the country within the next six to 12 weeks.

On the part of the $3.4 billion expected from the IMF, the finance minister said that it would not be tied to any conditionality, adding that so far, about 80 countries had applied for such funding facility as requested by the Bretton Woods institution.

“We are continuing our engagements with the World Bank, the AfDB, the IDB and the IMF to access concessional funding to support the implementation of the 2020 budget.

“We have also applied for funding from the IMF’s COVID-19 Rapid Credit Facility to draw from our existing holdings with the World Bank Group/IMF. This loan will not be tied to any conditionality.

“However, it is important to clarify that Nigeria does not intend to negotiate or enter into a formal programme with the IMF at this time or in the foreseeable future,” she said.

She added, “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. We have in the first instance applied for that maximum amount.

“We have requested from the World Bank $2.5 billion from the AfDB, $1 billion.

“Let me state that the requests are for the nation, both for the FG and the states.”

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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