World Bank, IMF suspend debt payments due to coronavirus pandemic

World Bank, IMF suspend debt payments due to coronavirus pandemic

The International Monetary Fund and World Bank on Wednesday, March 25; announced a suspension on debt repayments from Nigeria and other sub-Saharan Africa nations; so that they can battle the coronavirus pandemic.

Debt Management Office in January stated that the Federal Government and the 36 states; as well as the Federal Capital Territory, owed a total N26.22tn as of September 30, 2019.

The breakdown of the debts by the DMO further showed that Nigeria owes a multilateral debt of $12,343.17m; bilateral debt of $3,429.98m; and a commercial debt of $11,168.35m.

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“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.

Nigeria is owing IDA $9,405.58m, according to the document released by the DMO in January 2020.

The IMF and World Bank called on 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 China (Exim Bank of China) – $2,746.92m; $France (AFD) – $365.50m; Japan (JICA) – $76.52m; India (Exim Bank of India) – $29.59m; as well as 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 also 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, AFP reports.

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