The Federal Government on Thursday declared that it has no plan to approach the International Monetary Fund to borrow from the estimated $50 billion, which the IMF had earlier announced on Wednesday that it plans to use and support struggling economies in Africa.
The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, disclosed this at a press briefing during the ongoing Spring Meetings of the World Bank/IMF in Washington DC, United States.
The Managing Director, IMF, Kristalina Georgieva, had advised countries facing economic pressures to act swiftly in seeking financial support when necessary, warning that delays could worsen economic conditions.
“My advice is that when you need help financially, don’t hesitate to move fast, because the sooner we act, the more we protect the economy,” she said.
Georgieva also revealed that the institution was committed to financially supporting member countries through the current challenges, adding that about $20bn to $50bn was being planned by the IMF for this exercise.
“We anticipate financial demand for IMF support to range between $20bn and $50bn, which represents augmentation of some existing problems and prospective demands from new problems from at least a dozen countries, a number of them in Sub-Saharan Africa,” she said.
But while responding to a question on Thursday, whether the Federal Government would approach the IMF to borrow from the fund, Nigeria’s finance minister, Edun, responded negatively.
“Nigeria has no plan at the moment to approach the IMF for any other such burden,” Edun declared.
The minister also told the meeting on Thursday that African nations need “extra help” at this moment.
He noted that the Middle East crisis is one that affects African countries and economies disproportionately, stressing that while nations in this region “are not creators in any way of this situation, they stand to command greater pressure than perhaps any other region.”
The minister added, “This is in terms of the threat to macroeconomic stability, growth trajectories, and their ability to create jobs and reduce poverty in their countries.
And I think that is a clear statement, particularly to those identified as the most vulnerable oil-importing countries. They need and deserve extra help at this time.”
Recall that Georgieva earlier observed that many of the countries most affected by the Middle East crisis are located in Sub-Saharan Africa, adding that the IMF was working to identify those in urgent need of assistance. “We are very determined to use this week to identify which of the countries must get our support,” she stated.
She emphasised the importance of strong fiscal and economic policies, urging governments to build buffers during periods of economic stability to better withstand future shocks. According to her, prudent economic management in good times remains critical for resilience during downturns.
The IMF chief also disclosed that during a meeting with central bank governors and finance ministers from Africa held the previous day, officials did not request immediate financial assistance but instead sought policy guidance.
“But, of course, there could be a need for financial support. And my advice is that when you need help financially, don’t hesitate to move fast, because the sooner we act, the more we protect the economy,” she said.
Georgieva highlighted the broader global implications of the Middle East conflict, noting that it has already inflicted significant economic damage. “We have been watching developments in the Middle East. A war that causes significant pain to people and economies in the region and around the world. The impact on the global economy is already large,” she said.
She explained that supply chain disruptions and damage to infrastructure are driving up prices and slowing global economic growth. According to her, global growth is projected to decline from 3.4 per cent last year to 2.1 per cent in 2026. She warned that if the conflict persists and oil prices remain elevated for a prolonged period, global economic conditions could deteriorate further.
“But if the conflict persists, and oil prices stay high for an extended period, we must brace for tough times ahead,” she added.
On the IMF’s global outlook, Georgieva cautioned that in a worst-case scenario, global growth could fall to two per cent, stressing that the impact would be widespread. She noted that countries that depend on energy imports are particularly vulnerable, many of which are low-income or fragile economies.
“In the most adverse case, growth could fall to two per cent, and the shock is global,” she said, adding that the highest negative impact is being felt by energy-importing nations.
The PUNCH