Gita Gopinath, the International Monetary Fund (IMF) Chief Economist and Director of the research department, says Nigeria doesn’t have the resources to deal with the economic fallout of the COVID-19 pandemic despite being an oil-exporting country.
Gopinath made this known while addressing the capability of countries combating the negative impact of COVID-19 pandemic on their economy in IMF October World Economic Outlook. She said unlike advanced countries, some oil-exporting countries were struggling and will need assistance.
She said Nigeria and other oil-exporting countries are battling with low oil prices, health crisis, and the impact of COVID-19 on their economy. Equity News had reported that Nigeria’s economy will contract by -4.3 percent, thereby, falling into recession.
“They have been hit by the health crisis and they have been hit because they are oil exporters which had a collapse and more importantly, they just don’t have the resources that advanced economies have to deal with this crisis,” Gopinath said.
Nigeria Needs To Borrow More
Gopinath also stated that emerging markets (countries) have been able to access funds higher than previous years amidst the COVID-19 pandemic because the world is not experiencing a financial crisis. Countries, like Nigeria, have been utilising debts to sustain and mitigate their economy amidst the pandemic.
“Because we don’t have a financial crisis at this point, many emerging markets are able to borrow at record levels in foreign currency this year relative to previous years.” Gopinath said in the IMF October outlook.
She said the money received by these countries is not enough, and more funds from international creditors need to be disbursed to the emerging markets. Gopinath explained that the support could be in form of concessionary financing, aid and debt relief, and restructuring.
“There are going to be developing and low-income economies that would need debt relief and, in some cases, restructuring of debt to make sure they have the space to do the spending that they need,” she said.
