The International Monetary Fund (IMF) has proposed a $50 billion trust fund for Nigeria and other low and also vulnerable middle-income countries.
This was contained in a blog post published on Thursday, January 20; which explained that the fund was targeted at helping countries in that category to build resilience as well as sustainability.
“A proposed $50-billion trust fund could help low-income and vulnerable middle-income countries; build resilience to balance of payments shocks and ensure a sustainable recovery,” said the Washington-based institution.
“Even as countries continue to battle COVID-19, it is crucial not to overlook the longer-term challenge of transforming economies to become more resilient to shocks and achieve sustainable and inclusive growth.
“The pandemic has taught us that not addressing these long-term challenges in a timely manner can have significant economic consequences, with the potential for the future balance of payments problems.”
The IMF fund comes as part of the $650 billion Special Drawing Rights (SDRs) – an equivalent of about SDR456 billion – issued by IMF in August last year to help vulnerable countries boost liquidity through Resilience and Sustainability Trust (RST).
In its latest blog post, the financial institution identified climate change as another long-term challenge that threatens macroeconomic stability and growth in many countries through natural disasters and disruptions to industries, job markets, and trade flows, among others.
It believes it is the shared responsibility of individual countries; and the international community to overcome these global public policy challenges; and it is time to take appropriate actions.
“In a previous blog, we explained how the IMF is considering options; for channeling some of the $650 billion SDRs issued in August 2021; from countries with strong external financial positions; to vulnerable countries through a Resilience and Sustainability Trust, or RST.
“The RST’s central objective is to provide affordable long-term financing to support countries; as they tackle structural challenges.
“As we’ve continued to work toward developing the RST; our current thinking on the key design features—which we outline further below; aim to balance the needs of potential contributors and borrowing countries.
“With broad support from the membership and international partners; we hope that the Trust can be approved by the IMF Executive Board before the upcoming spring meetings; and for it to become fully operational before the year’s end.”