Among the myriad of problems bedeviling the economy, experts have identified liquidity scarcity as the primary constraint to be tackled on the road to recovery.
Making the announcement in Washington DC Thursday, the Managing Director, IMF, Christine Lagarde, said the body was committed to addressing inequitable distribution of resources the world over.
“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,” she said.
“That 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.
Meanwhile, Punch reports that top Nigerian officials attending the meeting revealed the country wasn’t keen on the IMF loan owing to their strong neo-liberal conditions.
“The IMF people have been talking to us for some time, asking us to come and take loans, but their facilities come with too many unfavourable conditions,” an official said on the condition of anonymity.
“For instance, they told us to remove fuel subsidy and devalue the naira, which we did. If we take their fresh offer, they may ask us to raise the price of fuel and further devalue the currency, but these will create unrest in the country because the people are already suffering and we are aware of this.
“We will rather take a facility from the World Bank. The IMF facility comes with too many conditions; though we need a lot of funds to come into our economy now, we have to be wary of some of the tough conditions attached to them.”
After the gloom of recession, Nigerians can look favourably towards recovery as IMF’s offer comes weeks after the African Development Bank (AfDB) offered the country loan facilities to the tune of $1bn as a means of stimulating inclusive growth.