The executive board of the International Monetary Fund has approved the sum of $3.4 billion as Rapid Financing Instrument as fiscal support to Nigeria during the period of coronavirus pandemic. The fund requested by Nigeria is to be used to mitigate the impact of the coronavirus pandemic on the country’s economy as it grapples with dwindling government revenue and an economic crisis following the crash of crude oil prices globally. This came as Nigeria’s Senate approved President Muhammadu Buhari’s request to borrow ₦850 billion ($2.36 billion) domestically to finance the country’s 2020 budget. The loan approved by the upper chamber Tuesday would replace the original plan to borrow the equivalent amount in overseas debt, due to “less attractive” conditions in international capital markets. The move, according to Senate President Ahmed Lawan is due to the coronavirus pandemic and low global oil prices. Nigeria planned to raise as much as $6.9 billion from multilateral lenders to help fund efforts to stop the spread of the coronavirus and counter its impact on the country. The country’s Finance Minister Zainab Ahmed said the FG would seek assistance from the International Monetary Fund, along with a $2.5 billion loan request from the World Bank and a further $1 billion from the African Development Bank.
The Nigeria Centre for Disease Control (NCDC) has declared an end to the emergency phase of the Lassa fever outbreak in the country. In a statement on Tuesday, the agency said it took the action following “successive decline” in cases below the emergency threshold since the outbreak started in 2020. NCDC data showed the Lassa fever case count has been on the decline in the last three weeks. While the outbreak is not over yet, recorded cases have dropped below levels considered to be a national emergency. The agency said it decided to lower the risk level of the outbreak after an epidemiological review it carried out in coordination with the World Health Organisation (WHO). On January 24, the NCDC declared a Lassa fever outbreak and activated a national emergency operations centre (EOC) to tackle the disease. There were 979 confirmed cases and 188 deaths across 27 states, including the Federal Capital Territory.
Rating firm, Moody’s Investors Service has changed from stable to negative the banking system outlook for South Africa, Nigeria and Morocco in the light of the crude oil price slump and the spread of the coronavirus. The agency said the outbreak would cause banks’ asset quality to deteriorate and put pressure on profitability while slowing economic growth of three of Africa’s largest economies. Specifically, the rated banks in Nigeria will face weakening loan quality and foreign-currency liquidity as low oil prices and the pandemic weigh on the economy. This is even as the country is already challenged with slow economic growth and rising regulatory costs. Banks’ exposure to the oil and gas industry, the firm said, is substantial, at around 27 per cent of total loans at the end of 2019, making the system susceptible to the oil price slump, Moody’s said. It added that the county’s largest banks, however, will continue to benefit from high government support as the banking system is highly dollarised, putting pressure on both assets and liabilities in the event of a naira devaluation.
The implementation of the African free trade agreement will not begin on 1 July as planned due to disruptions caused by the new coronavirus pandemic, the Secretary-General of AfCFTA, Wamkele Mene said. The senior official said on Tuesday during a conference call that it is obviously not possible to commence trade at the period agreed under the current circumstances. The continental free-trade zone was expected to create a $3.4 trillion economic bloc with 1.3 billion people across the continent. It aimed at creating, amongst others, a customs union and the free movement of capital and business travellers – the world’s largest. Nigeria joined the pact on 7 July last year after expressing concerns about the agreement. 54 of all 55 African countries signed the pact with Eritrea now indicating willingness to sign after resolving its dispute with Ethiopia. Notably, the agreement which entered its operational phase on 7 July 2019 was expected to kick off in July 2020 following the completion of negotiations on the last Phase 1 negotiation item concerning a schedule of tariff concessions and Phase 2 negotiations on protocols for competition, intellectual property and investment.