The Nigerian minister of finance, budget, and national planning, Zainab Ahmed, has disclosed plans to take advantage of the IMF’s newly created fund.
Federal Government is considering tapping into an IMF relief fund.
This is coming amidst an already troubling debt service.
The Nigerian finance minister noted that a debt restructuring scheme would be implemented.
The Nigerian federal government is looking to acquire funds from the International Monetary Fund (IMF).
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She made the announcement following the IMF- World Bank meetings on Wednesday, which were held in Washington DC.
This is coming amidst the country’s growing domestic credit, and most notably, the country’s current domestic debt servicing.
However, the finance minister stressed that her office has been engaging financial institutions to look into the country’s portfolio debt to restructure and further stretch the debt service period to give more fiscal relief.
“It is a fact that Nigeria’s debt has increased over the last three to four years, and this increase in debt was occasioned by the different kind of exogenous shocks that the country faced, which is not unique to Nigeria,” she said.
Speaking on the potential of negotiating with the IMF, the finance minister noted that the viability of the relief fund the IMF is offering will determine if the Nigerian government will take the loan.
“The last drawing we had from the IMF is the second round of special drawing rights (SDRs) that was provided for all the member countries. The IMF recently offered a food security package that countries can draw, and it is equivalent to about 50% of their SDRs.
“We have not decided to draw on that. We have to examine the requirements, terms, and conditions, to see if it will be safe for us to draw because we don’t want to be drawn into an IMF program,” she added.
“If they work for us, we will now decide to take it because the funds can certainly be useful in terms of adding to our reserves and coping with the challenges the country is facing.
The finance minister also spoke on the subject of debt restructuring and how a huge chunk of the country’s revenue next year will be allocated to debt servicing.
“Unfortunately, the cost of debt service is rising because of the rising interest rate globally, resulting in higher debt service costs. Our projection from the debt sustainability analysis is that Nigeria can cope with its debt service,” Zainab Ahmed said.