COVID-19: IMF, World Bank suspend debt payments by Nigeria, others

The International Monetary Fund IMF and the World Bank on Wednesday announced a temporary suspension of debt payments from Nigeria and other sub-Saharan Africa nations to enable them battle the coronavirus pandemic, AFP reports.

Recall that the Nigeria’s Debt Management Office in January stated that the Federal Government and the 36 states, as well as the Federal Capital Territory, owed a total of N26.22 trillion as at September 30, 2019.

“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 Washington-based development lenders said in a joint statement.

“The move aims to help countries that are home to two-thirds of the world’s population living in extreme poverty – largely in sub-Saharan Africa – and qualify for the most generous, low-cost loans from the International Development Association financed by wealthier nations,” it added.

“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries,” which will face “immediate liquidity needs to tackle challenges posed by the coronavirus outbreak,” the organisation said.

According to a document released by the DMO in January 2020, Nigeria is indebted to the IDA to the tune of $9.4m.

The IMF and World Bank asked the Group of 20 nations to support the initiative for “all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

Among the bilateral creditors that Nigeria owes as of September 2019 are France (AFD) – $365.50m; Japan (JICA) – $76.52m; India (Exim Bank of India) – $29.59m; and Germany (KFW) – $211.45m.

In addition, the institutions called for an analysis of the financing needs these countries will face, and whether their total debt load is sustainable.

Part of the World Bank, the IDA is one of the largest sources of assistance for the world’s 76 poorest countries, providing zero or low-interest loans spread over 30 years or more, and grants to some distressed nations.

In the fiscal year ending June 30, 2019, IDA commitments totaled $22 billion, of which 36 percent was provided on grant terms, according to the World Bank.

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