The International Monetary Fund (IMF) has proposed has proposed a $50bn trust fund for Nigeria and other low-income and vulnerable middle-income countries in an effort to build resilience to balance of payments shocks.
The IMF disclosed this in a blog post titled, ‘A New Trust to Help Countries Build Resilience and Sustainability.’
The IMF stated that amid the covid-19 pandemic it is crucial not to overlook the long-term challenge of transforming economies to become more resilient to shocks and achieve sustainable and inclusive growth.
A proposed $50bn trust fund could help low-income and vulnerable middle-income countries build resilience to balance of payments shocks and ensure a sustainable recovery,” the report said.
The IMF explained that the shock of the pandemic shows the importance of rectifying long term challenges:
“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 future balance of payments problems.”
The IMF Identified Climate change as another long-term challenge that threatens macro-economic stability and growth in many countries through natural disasters and disruptions to industries, job markets, and trade flows, among others.
The IMF stated that the challenges are not peculiar to low-income countries alone, classifying them as global public policy challenges.
“These are global public policy challenges, and it is the shared responsibility of individual countries and the international community to take timely actions,” the IMF said.
The IMF would need the support of its member states and approval by the IMF Executive Board for the proposed Fund:
“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.”