The International Monetary Fund (IMF) had granted Nigeria’s request for a $3.4 billion loan, the federal government had claimed the loan is flexible and is to be repaid in five years.
On the other hand there has been report going round among Nigerians that was a drawdown on Nigeria’s savings with the IMF without any conditions attached. It should be on note that every IMF member state has a deposit with the IMF, this savings determine the countries strength in the Britton wood institution and is referred to as the Special Drawing Right.
The finance Minister, Mrs. Zainab Ahmed had explain on an Nigerian Television Authority (NTA) programme that the money was granted at a one percent interest rate with a three and a half years repayment delay and a repayment plan of five years, the minister also said the loan will not be tied to any conditionality’s.
In a reaction according to leadership, a professor of capital market Uche Uwaleke, urged the government “to be as wise as a serpent” in her dealing with the IMF.
Uwaleke said that ”while the government is encouraged to muster every resource in the fight against the pandemic, entering into a debt trap will clearly jeopardize economic recovery effort post COVID-19.”
Beyond that, Uwaleke said that except the relevant section is amended by the National Assembly, the IMF loan, unlike the long tenured concessional facilities from the World Bank and AfDB, contravenes Section 41 of the 2007 Fiscal Responsibility Act which requires that the government can only go for long -term concessional loans for capital expenditure.
The US$3.4 loan was to help the Nigerian government in the fight against the #COVID19 and the sharp fall in the global oil price.