Urges prudent use of oil windfall to strengthen economies
By Rejoice Peterside
The International Monetary Fund has indicated plans to provide up to $50 billion in financial support to Nigeria and other vulnerable economies affected by the ongoing Middle East crisis.
The Managing Director of the IMF, Kristalina Georgieva, disclosed this during the unveiling of the Fund’s Global Policy Agenda at the ongoing Spring Meetings of the IMF and World Bank in Washington, D.C.
Georgieva said the crisis represents a major economic shock, particularly for countries that rely heavily on energy imports and have limited fiscal capacity to respond.
“We anticipate near-term demand for IMF financial support to range from $20 billion to $50 billion. This reflects expected new programmes from at least a dozen countries, most of them in Sub-Saharan Africa,” she said.
According to her, the IMF is working with global partners to coordinate a comprehensive response aimed at cushioning the economic impact on vulnerable nations.
She described the Fund as a “firefighter” for member countries, stressing that early engagement by countries seeking assistance would enhance the effectiveness of interventions.
The IMF boss, however, cautioned governments against rushed policy decisions, urging a balanced approach in managing the economic fallout.
On monetary policy, she advised that countries with stable economic conditions should adopt a “wait and see” approach, while others may need to act early depending on domestic realities.
She also warned that rising global debt levels are constraining fiscal space, noting that public debt is projected to exceed 100 per cent of global GDP by 2029, a level not seen since the aftermath of World War II.
Georgieva further noted that many African countries fall within the most vulnerable category due to weak fiscal buffers and dependence on imports.
“I have in my office a map showing countries’ dependency on imports and fiscal space, and it is concerning that many African countries fall into the high-risk category. We are determined to support those most in need,” she said.
She added that African policymakers are increasingly prioritising structural reforms and policy support over direct financial assistance, including efforts to deepen local currency markets.
Meanwhile, the IMF warned that rising energy, fertiliser, and shipping costs linked to the crisis could slow economic growth, worsen poverty levels, and increase food insecurity across the continent.
Providing further insight, IMF economist Davide Furceri said oil-exporting countries like Nigeria may benefit from higher crude prices but must manage such gains carefully.
He advised that any temporary oil windfall should be used to rebuild fiscal buffers and reduce debt vulnerabilities rather than increase spending.
The IMF’s latest position underscores growing concerns about the global economic ripple effects of geopolitical tensions, as developing economies brace for potential shocks while seeking financial and policy support to stay resilient.
