Zainab Ahmed, Minister of Finance, Budget and National Planning, has disclosed that
Nigeria is borrowing $3.4 billion from the International Monetary Fund (IMF), to curb the spread of Coronavirus and regulate the crash in crude oil prices.
Ahmed stated this In an interview on Channels Television’s Politics Today.
She noted that the money will support the budget and stabilize the economy, especially the revenue from oil and gas.
“The financial package is for assistance to curb this COVID-19 pandemic and the shock that we have had in terms of the crash in the crude oil prices.
“It’s broad, it will support the budget, stabilize the economy from the significant decline in the revenues from oil and gas as well as large expenditure to manage the health crisis,” she stated.
The minister revealed that the loan is to be paid within five years, with an interest cost of one percent.
“This $3.4bn loan is to be paid over a period of five years but before the payment starts, we have a moratorium of three and a quarter year which makes it about eight and quarter years.
“It is a facility with an interest cost of one percent”, she also said.
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On the structure of the loan, whether the federal government will be getting the naira equivalent, while the Central Bank of Nigeria (CBN) will get the dollar equivalent, the minister explained that the loan is a dollar currency loan, which will come into a special account that will be opened in the CBN, and be accessed and converted into Naira.
“It is a dollar currency loan so it will come into a special account that we will be opened in the CBN.
“The loan will be accessed and converted into naira.
“Yes, it is coming into the CBN as dollars but the amount we are using will be in naira,” she added.
The minister assured Nigerians that the funds will be used judiciously for the health sector, social development, and breaching the revenue gap that has affected the economy.
She added that the National Assembly will be exact in the use of these funds.
The board of the IMF had on Tuesday, approved the sum of $3.4 billion to support Nigeria’s COVID-19 fight.
The assistance, facilitated via the Rapid Financing Instrument (RFI), will help limit the decline in Nigeria’s international reserves, the IMF said.