Civil Society Organisations in Nigeria have welcomed the International Monetary Fund’s (IMF) prompt response to the Federal Government of Nigeria (FGN) request for financial assistance to fight the COVID-19 pandemic and shore up the country’s failing economy by approving a loan of US$3.4billion in emergency support.
They, however, urged the Government of Nigeria to prioritize and utilise these funds to improve health spending, socio-economic safety nets and support for Small and Medium scale enterprises.
While noting that Nigeria is facing its worst health, social and economic crisis in decades, they added that as in the rest of the world, the ongoing pandemic has knocked life out of Africa’s largest economy and threatened to collapse the country’s fragile health systems.
The crisis they stated, has led to a decline in tax revenues, collapse in commodity prices especially that of oil, Nigeria’s main export, diminishing official development assistance, and rising debt obligations, disrupted supply chains and high inequality levels.
According to the IMF, the pandemic will trigger the worst economic recession since the Great Depression, and far worse than that seen during the 2008 financial crisis.
An Oxfam analysis shows that this crisis could set back the fight against poverty thirty years in sub-Saharan Africa. The Economic Commission for Africa estimates that anywhere between 300,000 and 3.3 million African people could lose their lives as a direct result of COVID-19, depending on the intervention measures taken to stop the spread.
“Even before the ongoing pandemic, poverty and inequality levels were unacceptably high in Nigeria. Both the FGN and IMF therefore need to ensure that these funds are directed towards meeting the needs of the most vulnerable in society, especially women,children, internally displaced persons and rural communities”, said Constant Tchona, Oxfam in Nigeria Country Director.
Active citizens are an asset to society, especially in times of crisis such as pandemics and economic collapse. “To ensure full transparency, openness and accountability in the application of this loan to serve the people who need it most, we urge both Government and IMF to take a step further and support the creation of a civil society network to contribute to monitor the disbursement of the funds”, said Auwal Musa, Executive Director of Civil Society Legislative Advocacy Centre.
According to the Chief Executive of CODE, Hamzat Lawal, “the Nigerian Government and the IMF have the unprecedented opportunity to begin to turn the tide against the rising inequality gap by ensuring that the fund is channelled to fast-track the delivery of priority projects like healthcare delivery, education financing and empowering small businesses. Improving service delivery in these areas can have remarkable implications on building the Nigeria we wish for”.
The Government of Nigeria faces a dilemma of whether to save lives and livelihoods or continue meeting its obligations to global creditors. But it will cost more if the government chooses the latter. Lives lost can never be recovered.
“We call for an immediate cancelation of all payments owed by Nigeria to bilateral, international financial institutions and commercial lenders that are due in 2020. This will allow the Nigerian Government the needed fiscal space to save lives, fight the pandemic and resuscitate the flagging economy”, they stated.
Recall that on 28 April 2020, IMF Executive Board approved US$ 3.4 Billion in Emergency Support to Nigeria under the Rapid Financing Instrument to support the Government’s efforts in addressing the severe economic impact of the Coronavirus shock and the sharp fall in oil prices.
African governments through the African Union have called for a two-year debt standstill on all debt repayments.
Meanwhile, the CSOs noted that the provisions of the Fiscal Responsibility Act 2007 should be adhered to in disbursement and use of this fund to achieve effectiveness and value for money.