FG Not Transparent With Spending Of $3.4bn Covid-19 Loan—IMF

The International Monetary Fund (IMF) has accused the federal government of not being transparent and accountable in the spending of the $3.4bn Covid-19 intervention fund received back in 2020.

Ari Aisen, IMF Country Representative said this in the 2021 Article IV on Nigeria.

The Washington based lender had in April 2020, approved $3.4bn under its Rapid Financing Instrument to assist Nigeria tackle the impact of the Covid-19 pandemic.

But Aisen said in a monitored programme on Arise TV that the transparency commitment signed by the government when it received the $3.4bn refinancing instrument has not been effectively implemented.

Aisen said, “The performance has been mixed, in some cases there has been quite a bit of progress and in other cases, there is more work to be done and needs to be built.

“Let me give you an example which is one that is very important to the institution and to the country as a whole. I refer to all the countries that received emergency assistance from the IMF because of the IMF.

“One is the issue of governance and transparency. So, the ministry of Finance in the beginning after having received the support of the IMF had created a budget line that allowed tracking of spending that was committed to Covid-19.

“This was a very welcoming and positive move by all stakeholders to support transparency and be clearer about what is being done with those funds that were put in place.

“But unfortunately, there has been technical difficulties in terms of access and even the quality at some point of public information that needs to continue to be improved, because it has been a bit uneven. Not everyone and all the time have access to that information.

“So, we are calling on the authorities to really be mindful and finish the job that has already started and equally, the most difficult part of the job has already been done which is creating those lines. It is in the budget and it is not only the federal, but there is even state budget information that should be made available for everyone at all times.”

The IMF Country Rep also allayed fears that Nigeria may not be able to repay its $92.6bn total public debt.

According to Aisen, Nigeria has a track record of servicing its debt obligations.

“Nigeria has a very small debt to GDP ratio. It is a very solvent country. There is no doubt that Nigeria has the track record of being a strong sovereign that repays and pays its creditors on time. So, I think I want to allay those concerns.”

He cautioned politicians against uncontrolled political spending ahead of the 2023 presidential election.

He said, “I think it is very important to have more fiscal space, mobilize more revenues. So, part of our message is related to mobilizing more revenue, finding fiscal space, ensuring that spending is appropriate.

“There are many spending pressures including the elections, security and also with the fuel subsidies. It is very important in our view to have a very balanced fiscal policy.”