he International Monetary Fund (IMF) recently announced the approval of $3.4 billion emergency support to Nigeria under its Rapid Financing Instrument (RFI) facility1. This support fund comes as part of efforts to assist the nation in mitigating potential balance of payment problems as a result of both the decline in oil revenue as well as the economic effects of the COVID-19 pandemic. The IMF has approved a total of $8.3 billion to countries in the sub-Saharan region under various financing schemes in order to mitigate the impact of the pandemic2. However, the fund to Nigeria is the single largest disbursement made to any nation within the region and it is expected to provide the country with the much-needed liquidity during this critical period. On the grounds that Nigeria is taking 100% of its quota under the RFI, the government is expected to pay a concession fee totaling about 1.05% with repayment period up to 5 years. Although, this loan is not expected to completely finance the government’s spending plans or avert the imminent recession, it will serve as a cushion for revenue shortage problems.
May 28, 2020
Nigeria Economic Update (Issue 18)
Crude oil prices have sustained upward increases for the past few weeks in October. While upward trajectory of crude oil prices is expected to be sustained in the short term in line with OPECs production cuts deal expected to run until March 2018, it is important to note that crude oil prices would remain volatile. The Nigerian government therefore should take advantage of periods of high revenue from crude oil exports to develop other sectors (such as Agriculture, Manufacturing and Services sectors) of the economy as key exporting and revenue generation sectors, and thus minimize volatility risks
GDP growth rate increased marginally by 2.84 percent in Q3 2015 from 2.35 percent in the preceding quarter. Nominal GDP increased to N24.3 million from N22.9 million in the preceding quarter. Growth in this period was attributed to the improved performance of the non-oil sector which grew by 3.05 percent. The Sectoral disaggregation shows that the Services and Agricultural sectors grew by 3.97 and 3.46 percent respectively, while the Manufacturing sector shrank by 1.75 percent.