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As part of its fiscal stimulus package to address the economic impacts of the Covid-19 pandemic in Nigeria, the federal government has announced a plan to access $6.9 billion in contributions and loans from multilateral institutions, including the International Monetary Fund (IMF), World Bank and African Development Bank (AfDB). The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this on Monday at a press briefing in Abuja.

Ahmed also said President Muhammadu Buhari has approved the withdrawal of $150 million from Nigeria’s sovereign wealth fund for distribution to the three tiers of government. The minister said the amount will be withdrawn from the Stabilisation Fund (SF), which is one of the three ring-fenced funds managed by Nigeria Sovereign Investment Authority (NSIA).

At the current official exchange rate of N360/$1, the total amount of $7.05 billion to be raised from the multilateral institutions and the NSIA translates to N2.54 trillion. Out of the funds to be mobilised from external sources, Ahmed said $3.4 billion is Nigeria’s total contributions to the IMF, which the federal government will apply to withdraw. Hence, the fund will have no conditions attached to it.

In addition, the federal government will apply for a $2.5 billion loan from the World Bank and another $1 billion from the AfDB. According to the minister, $1 billion from the World Bank loan will go to the states. She stated that the IMF fund can be accessible within six weeks. However, the World Bank and AfDB loans could take up to two months.

The Nigerian government has taken several steps already to reduce the spread of the coronavirus in the country, where the virus has infected 232 people and caused five fatalities, according to the latest figures provided by Nigeria Centre for Disease Control (NCDC) yesterday. On March 29, the president declared a two-weeks curfew in Lagos State, Ogun State and the Federal Capital Territory (FCT) as part of the infection prevention measures.

Ahmed said during the media briefing today that the funds will enable the government to tackle the impact of the pandemic on the economy. She had earlier said the government was planning an intervention fund to upgrade the country’s health care infrastructure, amid an oil price crash caused by low demand in the international market and a price war between Saudi Arabia and Russia.

According to a report by African Energy Chamber (AEC), Nigeria would suffer an oil revenue loss of about $15.4 billion, which represents 4 per cent of the country's gross domestic product (GDP), due to the fall in oil prices. The Minister of Finance, Budget and National Planning said the amount being mobilised would help in cushioning the negative impact of reduced revenue.

Several African countries have sought support from the IMF, World Bank and other multilateral financial institutions to boost their responses to the Covid-19 outbreak. The IMF said it has made available $50 billion through its rapid-disbursing emergency financing facilities for low income and emerging market countries to support their responses to the global pandemic. Of the amount, $10 billion will be made available at zero interest for the poorest members through the Rapid Credit Facility.

According to the NSIA, the SF was set up to provide fiscal stability support for the country in times of economic stress. The other two ring-fenced funds managed by the Authority are the Future Generations Fund (FGF) and the Nigeria Infrastructure Fund (NIF).