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Why did the IMF Executive Board Approved Immediate Debt Relief for 25 Countries and Ignored Nigeria?

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The Executive Board of the International Monetary Funds, IMF, approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.

Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) in a statement issued late Monday evening, reads, “This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

The Statement continued, “The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the U.K. and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”

The countries that will receive debt service relief today are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.

Nigeria’s Ngozi Okonjo-Iweala, also shared the announcement on her twitter handle. Mrs Iweala was last week named, a member of the external advisory group constituted by Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva.

The group of prominent individuals from around the world are to serve as the IMF chief’s special advisers that would provide insights to enhance the fund’s ability to serve its membership.

They consist mainly of high-level technocrats and policy experts with private sector experience.

The new external advisory group, inaugurated on Friday in Washington DC, is to also provide perspectives from around the globe on key developments and policy issues.

According to the Centre for Global Development, Nigeria has $36 billion in external debt, 100 million people living on less than a dollar a day, and a fledgling democratic government attempting reforms, Nigeria should have been a strong candidate for debt relief. Yet, in part because of its oil revenues, Nigeria slipped through the cracks of debt relief programs.

In 2019, the IMF urged Nigeria to curb its large appetite for Chinese loans as the country struggles with a €70 billion  debt burden.

That’s up from €62 billion in 2017, representing a year-on-year growth of 12.25 per cent. 

But Cheta Nwanze, a partner at SBM Intelligence tells NewsWireNGR, “Our people (Nigeria) have spent years demonising IMF so to go to them is hard. Plus, IMF always demand a restructuring as a precondition for their loans. It is something our people do not want to do yet, hence the reason they keep backing away from an IMF loan”.

“So essentially, it is inaccurate to say that Nigeria isn’t getting IMF debt relief as we are not really exposed to them. I think that will soon change as our other loan sources are drying up”.

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