Nigeria Plans Drawdown Of IMF Account In Fresh N2.67trn COVID-19 Stimulus.
AMINA HUSSAINI, Abuja
For fear of being overwhelmed by the effects of the rampaging COVID-19, the federal government is seeking a total of ₦2.67trillion to complement the ₦500 billion already earmarked for a new stimulus package.
The money is expected to come from her facility with the International Monetary Fund (IMF) totalling $3.4 billion in addition to $2.5 billion from the World Bank, $1 billion from the African Development Bank (AfDB) and $150 million from the Stabilisation Fund of the Nigeria Sovereign Investment Authority (NSIA).
The ₦2.67 trillion excludes what the government intend to access from the Islamic Development Bank (IDB) and its dividends from the Nigerian Liquified Natural Gas (NLNG), according to the Finance Minister, Zainab Ahmed.
“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 no less. We have in the first instance applied for that maximum amount, then in the process when we negotiate we might get the maximum amount or less.”
“This is the provision that the IMF has made for every member country that one can apply for between 50 to 100 per cent of ones’ contribution to the IMF.”
She explained that the IMF programme has no conditions attached and about 80 countries have also applied to draw from their contributions to the IMF.
Other sources of fund the government hopes to draw from to meet the challenges of the coronavirus the minister said include a “request from the World Bank for $2.5 billion; from the African Development Bank (AfDB) $1billion.”
The request made to the IMF, World Bank, IDB, and the AfDB she said “are a request for the nation both for the Federal Government as well as the state.
In order to address the emerging fiscal risks, as a result of the drop in the international oil prices and the global outbreak of coronavirus (COVID-19), President Muhammadu Buhari has given a number of approvals including the withdrawal of US$150 million from the Nigeria Sovereign Investment Authority (NSIA) Stabilisation Fund to support the June 2020 Federation Accounts Allocation Committee (FAAC) disbursement.
The Stabilisation Fund the minister said, “was created for such emergencies, and based on the fiscal assumptions underpinning the 2020 Appropriation Act, monthly FAAC disbursements to the federal and state governments were projected at N888.5 billion.”
She stated that “our experience shows that monthly FAAC receipts must average at least N650 billion for the federal and state governments to meet their current obligations. Unfortunately, we project that monthly receipts may decline to below N400 billion, over the next three to six months.”
She also revealed that President Buhari has also approved that the Federal Ministry of Finance, Budget and National Planning should engage with the Central Bank of Nigeria (CBN) to agree on a debt and interest moratorium for states on the federal government and CBN-funded loans, in order to create fiscal space for the states, given the projected shortfalls in FAAC allocations.”
“Accordingly, once the monthly average FAAC receipts fall below a specific threshold, interest and capital payments by states shall be suspended till monthly average FAAC receipts exceed the threshold” she disclosed.
The details of this moratorium she said: “will be expeditiously worked out with a view to submitting the final proposals for President Buhari’s guidance and final approvals.”
In her words: “the intervention is vital to create fiscal space for the States, as they deal with the health and economic impact of the crisis. States will also be encouraged to explore similar arrangements on their outstanding debts to commercial banks.
The ₦500 billion Fiscal Stimulus Package on its own comprises various measures with funding drawn from various Special Funds and Accounts, in consultation with and with the approval of the National Assembly.
The N500 billion is proposed to be utilized to: upgrade healthcare facilities to support States in improving healthcare facilities; Finance the creation of a Special Public Works Programme; and Fund any additional interventions that may be approved by Mr. President.
With regards to the Special Public Works Program, Zainab Ahmed said President Buhari had previously approved a Pilot Special Public Works Programme in eight (8) States to be implemented by the National Directorate of Employment (NDE) from February 2020 to April 2020.
But given the current conditions President Buhari “has now approved that this Programme is extended to all 36 States and the FCT from October 2020 to December 2020.”
The selected timeframe is to ensure that the Programme is implemented after the planting season, and it will result in the employment of about 774,000 Nigerians (that is, 1,000 people per each Local Government).
N60 billion in allowances and operational costs have been earmarked from the COVID-19 Crisis Intervention Fund for this initiative.
The Federal Ministry of Finance, Budget and National Planning is also evaluating how best to extend the Special Public Works Programme, to provide modest stipends for iterant workers to undertake Roads Rehabilitation, Social Housing Construction, Urban and Rural Sanitation, Health Extension and other critical services.
This intervention the minister said, “will be undertaken in conjunction with the key Federal Ministries responsible for Agriculture, Environment, Health and Infrastructure, as well as the States, to financially empower individuals who lose their jobs due to the economic crisis.”
Further details regarding the operation of the N500 billion COVID-19 Crisis Intervention Fund Ahmed said “will be announced once the consultations with the National Assembly and the key Ministries are concluded.
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