Nigeria, Africa’s most populous country, may fall into recession this year if an economic stimulus plan isn’t put in place to check the effects of the coronavirus pandemic, Finance Minister Zainab Ahmed said.
The country of more than 200 million people could see its economy shrink by as much as 3.4%, Ahmed said Tuesday on Arise TV.
Nigeria needs radical action to avoid an economic contraction, said Ahmed, who added that the country’s multilateral creditors were considering suspending debt repayments to help.
“We will talk to the Chinese. We will negotiate multilateral loans and bilateral loans and where we get accommodation we will take it,” said Ahmed, without saying how much the government expects to save in payments this year.
The government of President Muhammadu Buhari has asked for $7 billion in loans from multilateral creditors, including the International Monetary Fund, to allow the government to increase health spending as the Covid-19 virus spreads in Africa’s most populous country. Tumbling oil prices have slashed revenue to the continent’s top oil producer, which could face its worst recession in decades this year.
Nearly half of Nigeria’s outstanding external debt is with multilateral lenders, with the World Bank Group being its top creditor with $10.1 billion in loans. Beijing-based Export-Import Bank of China is the second largest single creditor with loans totaling $3.2 billion while Eurobonds account for $10.86 billion or 39% of external debt.