The IMF's media office said in a statement on Tuesday, April 28, 2020 that the financial support, which comes from its Rapid Financing Instrument, will help limit the decline in international reserves.

It is also expected to provide financing to Nigeria's budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic, and of the sharp fall in international oil prices. 

"The near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased. 

"Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels. 

"The pandemic - along with the sharp fall in oil prices - has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs," the IMF said.

The organisation said it will remain closely engaged with Nigeria and continue to provide policy advice and further support.

IMF's Deputy Managing Director and Acting Chair, Mitsuhiro Furusawa, said the short-term focus on fiscal accommodation would allow for higher health spending and help alleviate the impact of the crisis on households and businesses in Nigeria.

He said, "Once the COVID-19 crisis passes, the focus should remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to keep Nigeria's debt sustainable and create fiscal space for priority spending. 

"Implementation of the reform priorities under the Economic Recovery and Growth Plan, particularly on power and governance, remains crucial to boost growth over the medium term.

"The emergency financing under the Rapid Financing Instrument (RFI) will provide much needed liquidity support to respond to the urgent BOP needs. 

"Additional assistance from development partners will be required to support the government's efforts and close the large financing gap. 

"The implementation of proper governance arrangements—including through the publication and independent audit of crisis-mitigating spending and procurement processes - is crucial to ensure emergency funds are used for their intended purposes."

Nigeria's Minister of Finance, Budget, and National Planning, Zainab Ahmed, explained earlier in April that the financial support would come from Nigeria's contribution to the IMF, and without IMF conditionalities.

"The COVID-19 Rapid Credit Facility is a right for every member country to draw up to limit of the amount that it has contributed and Nigeria has expressed its interest in that regard. 

"We have about $3.4 billion with the IMF and we intend to withdraw the entire amount. The IMF has a provision that we can withdraw between 50% to 100%," she said.

Nigeria is also in talks with organisations such as the World Bank, the Islamic Development Bank, and the African Development Bank for concessionary loans to effectively fight the pandemic.

Over 3 million people have been infected across the world since the coronavirus disease was first detected in Wuhan, China in December 2019.

Nigeria has recorded 1,337 coronavirus cases in 32 states and the FCT, as of April 27.

255 people have recovered, but 40 people have died.