President Muhammadu Buhari has approved that the sum of $150 million should be withdrawn from the stabilization fund of the Nigerian Sovereign Investment Authority (NSIA). The fund is to help address emerging fiscals risks which the coronavirus pandemic has caused and to support the June 2020 Federation Accounts and Allocation Committee (FAAC) disbursement.
This is one of the various fiscal stimulus measures to be introduced by the Federal Government to cushion the effect of the coronavirus pandemic and the crash in crude oil prices on the Nigerian economy.
This was disclosed by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in Abuja on Monday, April 6, 2020, when she was making a presentation on the topic, ‘Fiscal Stimulus Measures in response to Covis-19 Pandemic and oil prices fall’.
The Minister noted that the stabilization fund was created for emergencies like this, while the government explores other options to augment the FAAC disbursement
According to her, the president has also asked that the Liquefied Natural Gas (LNG), should fast track the disbursement of dividend that is due to the federation account to augment for the revenue shortfall into the FAAC account.
The Minister also said 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 the Minister in her statement, ”The president has approved that the Federal Ministry of Finance, Budget and National Planning should engage with the CBN to agree on the debt and interest moratorium for states on Federal Government and CBN funded loans in order to create fiscal space for the states, given the projected shortfalls in FAAC allocations”.
”Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by states shall be suspended till monthly average FAAC receipts exceed the threshold”
She added that President Buhari has approved a temporary restructuring of the treasury single account in order to better mobilize funds from individuals, corporate organizations and donor agencies.
While answering questions from the media, Ahmed said that government plans to raise as much as $6.9 billion from multilateral institutions to help cushion the impact of the Covid-19 pandemic on the Nigerian economy which is characterized by low oil prices, low revenue generation, health crises, capital flight, shut down of businesses and so on.
Going further she said, the Federal Government is expecting $3.4 billion of that amount from the International Monetary Fund, $2.5 billion from the World Bank and another $1 billion from the African Development Bank.
However she said that Nigeria has no plans to enter into an IMF progamme, she said.
The government has started talks with multilateral lenders to suspend debt repayments for this year and next, Ahmed said.