The International Monetary Fund, IMF, has made an offer of zero interest loans to Nigeria and other countries facing economic crisis.
The Managing Director, IMF, Christine Largade, said this on Thursday in Washington DC, United States, at the ongoing annual meetings of the World Bank/IMF.
She said: “If we want to improve the inequality issue, we must have a strong international safety net. In this context, I am pleased to reveal that our board recently approved the extension of the zero interest rate on all concessional facilities from 2016 to 2018, and thereafter, if there is a need for an extension.
“It is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending capacity of close to $1tn by extending access to bilateral borrowing agreements.
“The new agreements that are being signed this week will run at least through the end of 2019, and will continue to serve as a third line of defence.
“As you know, the first line of defence is quota; the second line is a new arrangement to borrow; and the third line of defence will be those bilateral loans.
“We have so far received pledges of $344bn from 26 members. We look forward to others joining the effort. We will provide more details shortly; and there will be some signing sessions organised in the course of the next two days.”
Continuing, the IMF boss noted that “Prospects for low income economies may be more challenging with varied outlook. We see growth as too low, too long and benefitting few. By exploiting synergies in policies, we can overcome these challenges.
“We also believe that each country has something to offer. My hope is that at the end of these meetings, each finance minister, each governor of central bank will go back home thinking of what to fuel growth.
“For example, when monetary policy has been overstretched, fiscal policy can step up. This will also put in place the structural reforms that are much needed, which have been sorted out in some countries, but which are still lacking in other places.”
In response to the economic recession, the federal government is considering selling some national assets to generate money and reduce its financial burden.
The idea has, however, generated divergent views.
Some experts, including ex-Minister of Education, Oby Ezekwesili, and a former CBN boss, Charles Soludo, have kicked against the idea.
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