Multilateral institutions, The World Bank Group and International Monetary Fund (IMF), have suspended debt payment by Nigeria and other countries that fall within the International Development Association (IDA) cadre over the Coronavirus COVID-19) pandemic ravaging world economies.
The Debt Management Office showed that Nigeria’s 36 states and Federal Capital Territory have a combined debt of N26.22 trillion as at September 2019. But Nigeria’s total debt profile is estimated at N33 trillion when the $22.7 billion foreign loan for the federal government is approved and added to the debt list.
In a joint statement to the G20 concerning debt relief for the poorest countries, the Breton-wood institutions, said the coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.
“With immediate effect—and consistent with national laws of the creditor countries—the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country,” the statement said.
The G20 leaders are expected to task the World Bank Group and the International Monetary Fund to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries. “We will seek endorsement for the Proposal at the Development Committee during the Spring Meetings (April 16–17),” the statement said.
“The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action” it said.
