Nigeria plans to raise as much as $6.9 billion from multilateral lenders to help fund efforts to stop the spread of the coronavirus and tackle its impact on Africa’s largest economy. Bloomberg reported.
The government will seek $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and a further $1 billion from the African Development Bank, Finance Minister Zainab Ahmed told reporters Monday in the capital, Abuja. The authorities also joined other African governments by starting talks with multilateral lenders to suspend debt repayments for this year and next, she said.
Although the number of Coronavirus cases in Nigeria remains comparatively low at 300+, the global pestilence has hit its economy hard as plummeting oil prices and capital flight threaten to push the economy into recession.
Fitch Ratings earlier on Monday followed S&P’s March 26 decision to downgrade Nigeria’s credit rating further into junk territory, citing its dependence on oil, which represent about half of government revenue.
“The intervention is vital to create fiscal space for states as well as the federal government to enable all of us to deal more adequately with the health challenges and economic impact of the crisis,” said Ahmed. The government will also unlock $150 million from its sovereign wealth fund to help provide revenue to state governments, she said.
It was said in a report last month that Nigeria’s economy could contract 3.4% this year. That would be the most since 1983, according to World Bank data. In a worst-case scenario, in which the outbreak becomes more widespread both domestically and abroad, the report said the economy could shrink almost 9%.