Why IMF Denies Nigeria’s Debt Relief – Zainab Ahmed
POLITICS DIGEST – Nigeria’s Minister of Finance, Budget and National Development, Zainab Ahmed, has explained why the International Monetary Fund (IMF) did not consider the country for debt relief.
Early this week, the IMF announced the decision of its Executive Board to grant debt relief to 25 countries. Nigeria is not among the beneficiaries.
In his reaction, the President of the Nigeria Labour Congress, Ayuba Wabba, said Nigeria deserved to be granted debt pardon from IMF/World Bank.
The minister, in a series of tweets through her official Twitter handle, @ZShamsuna, on Thursday, said the relief was meant for the “poorest and most vulnerable members (of the group) to cover part of their IMF debt obligations.”
Mrs Ahmed used the tweets to confirm that Nigeria does not owe the IMF, although the country has so far contributed $3.4 billion to the Fund.
“It is true Nigeria is not a beneficiary of the recent IMF debt relief for 25 countries,” the minister said in her initial tweet.
“As indicated in IMF Executive Board statement, the relief ‘provides grants to our poorest & most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months.
“Since Nigeria is not indebted to the IMF, there is no outstanding debt obligation to be forgiven,” she clarified.
Rather, she reiterated her recent statement on Nigeria’s application for new IMF financing that is currently under consideration.
The new application, she said, was for financing under the Rapid Financing Initiative (RFI), under which Nigeria, like other members, was entitled to access up to 100 per cent of its contribution quota.
Announcing the debt relief last week, the Managing Director of the Fund, Kristalina Georgieva, said it was part of the group’s response to help address the impact of the deadly COVID-19 pandemic on poor and vulnerable economies.
She listed the benefiting countries as Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali and Mozambique.
Others are Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.
The relief, Ms Georgieva explained, would help the benefiting countries channel more of their scarce financial resources towards vital emergency medical and other relief efforts.
NLC President, Mr Wabba, said the demand for Nigeria’s inclusion among the list of beneficiaries for the COVID-19 related debt relief and debt moratorium was because of the devastating impact of the deadly Coronavirus pandemic.
As the most populous country in Africa and a major regional transportation hub, with very active citizens, the labour leader said Nigeria could be a major epicentre for future global waves of COVID-19 if adequate support was not extended to the country to fight and contain the coronavirus pandemic.
“With a burgeoning constituency of the poor, including the working-class poor, the danger staring Nigeria hard in the face is huge.
“Nigeria needs all the support it can get, including debt relief, moratorium, and pardon in order to enable the country tide over the waves of COVID-19 pandemic,” he said.
Again, with the dire economic crisis the country was facing from the recent plunge in the price of crude oil at the international market, he said Nigeria deserved financial relief to help meet her fiscal and budgetary challenges.