Falling oil prices: IMF assistance of $ 3.4 billion for Nigeria

A deserted street in Lagos, Nigeria, during the confinement in April 2020. AFP

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This sum corresponds to the quota paid by Nigeria to the international financial institution. The continent's leading oil producer depends on crude oil for 70% of its external income. Nigeria needs money to balance its budget and deal with the economic consequences of the Covid-19 pandemic.

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The $ 3.4 billion paid to Nigeria represents only part of the country's needs. In fact, in early April, Abuja also asked for $ 2.5 billion from the World Bank and $ 1 billion from the African Development Bank. A package of $ 6.9 billion, in total, to make up for a budget that was squeezed by the drop in crude prices and the global oil crisis.

At the moment, Nigeria has the greatest difficulty in selling its crude cargoes and must reduce its production within the framework of the agreement signed with OPEC , the organization which groups the oil producing countries.

However, at the start of the year, the country was counting on a barrel of $ 55 for its budget projections. It is currently less than $ 20, and the 2020 budget has already been the subject of major cuts.

The equivalent of five billion dollars has already been cut. The ministries and public enterprises see their allocations reduced by 20 to 25% and recruitments in the public service are stopped. In addition, the country should experience, according to international rating agencies, a recession of 1 to 1.5%.

If the situation is therefore difficult, it is not hopeless either for the largest country in Africa which is still very little in debt and which therefore has room for maneuver.

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  • Nigeria
  • Economic crisis
  • Oil
  • IMF
  • Coronavirus

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