By Ossom Raphael
ABUJA – As Nigeria continue to record news cases of Corona Virus, otherwise known as COVID-19, the federal government has concluded plans to borrow the sum of $3.5 billion (N1.330trn) to tackle the effect of pandemic on the economy.
Mrs. Zainab Ahmed, Minister of Finance, Budget and National Planning said this in Abuja, at a media briefing on the federal government’s response to the COVID-19 pandemic which has brought much fiscal distress to the global economy.
The minister said that the federal government will borrow $2.5 billion from the World Bank and $1 billion from the African Development Bank (AfDB).
According.to the Debt Management Office (DMO), Nigeria’s debt currently stands at N27.401 trillion ($84.053bn).
In addition, Nigeria is expected to access $3.4 from the International Monetary Fund (IMF) being part of its contribution to the fund as a member. Also, the federal government will access $150 million from the Stabilization fund (Nigeria Sovereign Wealth Fund) managed by the Nigeria Sovereign Investment Authority (NSIA).
This brings the total amount to be accessed by the federal government from loans and contributions to $7.050 billion.
“The $3.4 billion with the IMF, its our contribution and we are entitled to draw a hundred per cent and this is a provision the IMF has made for every member. This is a facility that has no condition attached to it.
“We have requested from the World Bank 2.5 billion dollars, from the African Development Bank 1 billion dollars.
“Let me state that the request we made to the IMF, to the World Bank, to the Islamic Development Bank, to the AfDB are request for the nation both for the FG as well as the States”, Mrs. Ahmed said.
The minister, further, said that President Muhammadu Buhari has approved the estqblishment of a N500 billion COVID-19 Crisis Intervention Fund.
Mrs. Zainab, said the establishment of the fund will involve drawing much needed cash resources from various Special Funds and Accounts, in consultation with and with the approval of the National Assembly.
According to her, the money would be used to upgrade healthcare facilities across the country; finance federal government’s interventions to support States improve their healthcare facilities; finance the creation of Special Public Working Programme in the 774 Local Government Areas that would engage 1000 persons per local government, and fund any other additional interventions that may be approved.
“The selected timeframe is to ensure that the Program me is implemented after the planting season is over, and it will result in the employment of about 774 Nigerians. N60 billion in allowance and operational costs has been earmarked from the COVID-19 Crisis Intervention Fund for this initiative”.
On the augmentation to the States’ Federal Accounts Allocation Committee (FAAC), Zainab said $150 million has been approved to support the June 2020 FAAC disbursement. According to the minister, the Stabilization Fund was created to take care of such emergencies.
“However, due to the significant drop in international oil prices, FAAC monthly disbursement have declined in recent months to N716.3 billion in January and N647.4 billion in February 2020. Unfortunately, we project that monthly receipts may decline to below N400 billion, over the the next 3 to 6 months,” she added.
The minister, also explained that Interest and capital repayment by states on CBN loans will be suspended once inflows into Federation Account drops below a particular threshold.
According to her, the President approved that the federal ministry of Finance, Budget and National Planning should engage with the CBN to agree on a “debt and interest moratorium for states on federal government and CBN-funded loqns, in order to create fiscal space for the States given the projected shortfall in FAAC allocations.”
On the palliatives for those in the lowest rung of the ladders, Ahmed disclosed that about 506 trucks of rice seized by Nigerian Customs Service will be released to the Ministry of Humanitarian Affairs to distribute to vulnerable members of society.
The minister allayed the fear of Nigerians regarding the disbursement of the fund donated by well spirited Nigerians saying that an independent steering committee that will monitor spendings from those funds would be constituted to ensure transparency in the way funds would be utilised.