The World Bank has started reconciliation of Nigeria’s and other debtor nations’ external debts with their creditors.
World Bank Group President David Malpass, disclosed this Wednesday at the G20 Finance Ministers and Central Bank Governors Meeting during the ongoing virtual World Bank/International Monetary Fund (IMF) Spring Meetings in Washington D.C.
According to Debt Management Office (DMO) data, Nigeria’s total external debts stood at $33.34 billion as at December 31, 2020. A breakdown of the debt statistics showed that Nigeria owes International Development Association $11.12 billion; Eurobonds, $10. 8 billion; IMF $3.53 billion; Exim Bank of China, $3.26 billion; African Development Bank, $1.6 billion, among others.
He said the World Bank is focused in helping Nigeria lift 100 million people out of poverty by supporting the government in its efforts to promote growth, job creation, and shared prosperity in a sustainable manner.
As part of these efforts, the World Bank supports Nigeria in ensuring fiscal and debt sustainability, including enhancing debt transparency and debt management at the federal and sub national levels.
The World Bank closely monitors the debt situation through the joint IMF-World Bank Debt Sustainability Framework and raises debt issues with the government as part of an ongoing dialogue.
“The World Bank also engages with the Nigerian government to improve the quality of public spending. Moreover, a key objective of the World Bank is to help attract private investment to crowd in financing for investments in infrastructure and human capital, for instance by de-risking private investments through public-private partnerships and foreign direct investments without increasing public debt levels,” he said.
Malpass said the World Bank found out that many debts, especially Eurobonds have non-disclosure clauses making transparency of the debt data very difficult.
He said the bank is also working closely with the International Monetary Fund (IMF) to support the implementation of the G20 Common Framework that requires greater transparency reconciling every country’s debt with creditors.
“Transparency is very important and there should be more balanced relationship between debtor nations and their creditors, as such relationships are presently not balanced,” he said.
Malpass said the bank is also helping Nigeria and many other countries to wind down subsidies to carbon intensive industries and secure a just transition away from coal.
Malpass said that the bank had 2020, committed $100 billion bank-wide to tackle Covid-19, saying it expects new vaccination operations in 50 countries by mid-year.
“COVID-19 will leave lasting scars on developing countries, from closed schools and physical stunting of children to lost jobs, the depletion of savings and assets, and growing debt overhangs. The crisis came on top of persistent development challenges, including stagnant median incomes, fragility and violence, and damage caused by climate change,” he said.
He advised all G20 countries to disclose the terms of their financing contracts, including re-schedulings, and to support the new debt reconciliation move to ensure integrity and transparency of all debts.
He said participation by commercial creditors and fuller participation by official bilateral creditors will be vital.
“I urge all G20 countries to instruct and create incentives for all their public bilateral creditors to participate in debt relief efforts, including national policy banks. I also urge G20 countries to act decisively to incentivize the private creditors under their jurisdiction to participate fully in sovereign debt relief efforts for low-income countries,” he said.