The IMF board on Tuesday approved 3.4 billion U.S. dollars in emergency financing for Nigeria to help deal with the economic damage inflicted by the coronavirus pandemic.
The loan aims “to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices,” the International Monetary Fund (IMF) said in a statement.
The funds come from the IMF’s Rapid Financing Instrument, which has been ramped up to get aid quickly to developing nations most vulnerable to the economic effects of shutdowns to contain the outbreak.
The Fund announced on April 9 that it has doubled the access to its emergency facilities – the Rapid Credit Facility and Rapid Financing Instrument – allowing it to meet the expected demand of about 100 billion U.S. dollars in financing.
IMF Managing Director Kristina Georgieva said the fund has received over 100 requests for aid from its members, and developing countries will need about 2.5 trillion U.S. dollars to deal with the impacts of the pandemic.
Africa’s most-populous country has been hit by both the virus’s arrival in its borders and plunging global demand for oil, Nigeria’s top export.
A price war between Saudi Arabia and Russia exacerbated the fall in crude prices, and a deal earlier this month between OPEC and other top oil producers hasn’t yet undone the damage.
“The COVID-19 outbreak – magnified by the sharp fall in international oil prices and reduced global demand for oil products – is severely impacting economic activity in Nigeria,” Deputy Managing Director Mitsuhiro Furusawa said.
“These shocks have created large external and financing needs for 2020.”
He praised the Nigerian government’s efforts to respond to the crisis, through higher health spending and support for households and businesses.