InsiderBLM Africa
Nigeria’s federal government is attempting to obtain funds from the International Monetary Fund (IMF).
Zainab Ahmed, Nigeria’s minister of finance, budget, and national planning, has announced plans to use the IMF’s newly established fund.
She made the announcement following the IMF-World Bank meetings in Washington, DC on Wednesday.
This comes in the midst of the country’s growing domestic credit, as reported here, and, more importantly, the country’s current domestic debt service. Read the full story here.
However, the finance minister emphasized that her office has been working with financial institutions to examine the country’s portfolio debt in order to restructure and extend the debt service period in order to provide more fiscal relief.
“It is true that Nigeria’s debt has increased over the last three to four years, and this increase in debt was caused by the various types of exogenous shocks that the country faced, which are not unique to Nigeria,” she said.
Speaking about the possibility of negotiating with the IMF, the finance minister stated that the viability of the relief fund offered by the IMF will determine whether the Nigerian government accepts the loan.
“The most recent drawing we received from the IMF was the second round of special drawing rights (SDRs) provided to all member countries.” The IMF recently offered countries a food security package worth approximately half of their SDRs.
“We have not decided to rely on it.” We must examine the requirements, terms, and conditions to determine whether it is safe for us to draw because we do not want to be drawn into an IMF program,” she added.
“If they work for us, we will take it because the funds can certainly help us add to our reserves and deal with the challenges the country is facing.”
The finance minister also discussed debt restructuring and how a large portion of the country’s revenue will be allocated to debt servicing next year.
“Unfortunately, the cost of debt service is rising as interest rates rise around the world, resulting in higher debt service costs.” According to our projections from the debt sustainability analysis, Nigeria can manage its debt service,” Zainab Ahmed said.
