The Former Deputy Governor of the Central Financial institution of Nigeria (CBN) Tunde Lemo has revealed that the $three.4bn mortgage from the Worldwide Financial Fund shall be used to help Nigeria’s steadiness of fee mode.
He said this throughout Channels Tv’s Enterprise Morning Programme on Thursday.
Mr. Lemo welcomed the thought of borrowing the fund, describing it as a novel one that may assist to keep away from a foreign money disaster.
He stated that the IMF is releasing about 100 p.c of Nigeria’s quota, noting that the fund is completely different from different undertaking services obtained from different sources.
READ ALSO: Why Nigeria Is Borrowing $three.4bn From IMF – Finance Minister
“That is completely different as a result of it goes on to help your steadiness of fee, like authorities income, the p.c that comes from international alternate earnings.
“And At this time due to the plunge in oil worth, we additionally have to curtail the output from a bit over $2m barrels per day to now $1.4m or $1.5m barrels per day.
“When your worth has plunged to beneath value, you begin to run wanting international alternate”.
He famous that COVID-19 is a worldwide pandemic that has precipitated a serious setback within the financial system, particularly the crash in oil costs.
Based on him, the nation must get monetary assist to cushion the impact of the virus.
“The nation should understand the fact that we need to get very rapid financial accommodation to cushion the effect, particularly our balance of payment support”.
He appealed to the Federal Authorities to revamp companies within the nation to keep away from conditions the place international locations won’t be able to function as a result of a scarcity of international alternate.
His assertion comes lower than 24 hours after the Minister of Finance, Zainab Ahmed stated that the mortgage will assist to supply financing for the nation’s finances, which has been severely affected by falling oil costs triggered by the pandemic and worth wars.
“The monetary package deal is for help to curb this COVID-19 pandemic and the shock that we now have had when it comes to the crash within the crude oil costs.
“It’s broad, it can help the finances, stabilize the financial system from the numerous decline within the revenues from oil and gasoline in addition to massive expenditure to handle the well being disaster”.
Ahmed stated that the mortgage is to be paid inside 5 years with an curiosity value of 1 p.c.
“This $three.4bn mortgage is to be paid over a interval of 5 years however earlier than the fee begins, we now have a moratorium of three and 1 / 4 12 months which makes it about eight and quarter years.
“It’s a facility with an curiosity value of 1 p.c”.