The International Monetary Fund (IMF) has recommended a $50 billion trust fund for Nigeria and other low-income and vulnerable middle-income countries to help them build resilience to balance-of-payments shocks.
In a blog post titled “A New Trust to Help Countries Build Resilience and Sustainability,” the IMF revealed this.
According to the IMF, it is critical not to underestimate the long-term challenge of reforming economies to become more robust to shocks and achieve sustainable and equitable growth in the face of the covid-19 epidemic.
“A suggested $50 billion trust fund might assist low- and middle-income countries build resilience to balance of payments shocks and ensure a lasting recovery,” according to the paper.
The shock of the epidemic, according to the IMF, emphasizes the need of addressing long-term issues. “The epidemic has taught us that failing to address these long-term concerns in a timely manner will have serious economic ramifications, including future balance-of-payments issues.”
Climate change, according to the IMF, is another long-term concern that threatens macroeconomic stability and growth in many countries by disrupting sectors, labor markets, and trade flows, among other things.
According to the IMF, the difficulties are not exclusive to low-income nations, and they are classified as global public policy concerns.
“These are global public policy concerns, and prompt action is a shared duty of individual nations and the international community.” IMF noted.
For the proposed Fund, the IMF would require the support of its member nations as well as the approval of the IMF Executive Board.
“We expect that the Trust can be authorized by the IMF Executive Board before the forthcoming Spring Meetings, and that it can become fully operational before the end of the year,” the IMF added, “with wide support from the membership and international partners.”