FG Plans to Borrow $6.9bn to Counter COVID-19 Spread
The Federal Government of Nigeria says it plans to raise $6.9 billion from multilateral lenders to help fund fight against the spread of coronavirus.
According to Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, the government will seek $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and $1 billion from the African Development Bank.
Speaking in Abuja on Monday, Ahmed disclosed that the country has joined other African governments to commence talks with multilateral lenders to suspend debt repayments for this year and next.
Although the number of coronavirus cases in the country has remained low at 232, when compared to other nations, this global scourge has hit many economies including Nigeria hard as plummeting oil prices and capital flight threaten to flat the economy. 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 over 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.
The government has also cut the average oil price used to calculate this year’s budget to $30 a barrel, from $57, and lowered its oil-output forecast to 1.7 million barrels a day from 2.18 million.
The Nigerian government uses about a quarter of its budget to pay for debt, compared with 5% for health-care spending, according to Finance Ministry data.
