The IMF approved US$3.4bn in emergency financial assistance under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.
The COVID-19 outbreak has magnified existing vulnerabilities, leading to a historic contraction in real GDP growth and to large external and fiscal financing needs.
Once the impact of the COVID-19 shock passes, the authorities’ commitment to medium-term macroeconomic stability remains crucial to support the recovery and ensure debt remains sustainable.
The near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased.
Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels
. The pandemic—along with the sharp fall in oil prices—has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs.