Nigeria to get $9.7bn debt relief from G-20
The Managing Director of the International Monetary Fund, Kristalina Georgieva, and the President of the World Bank, David Malpass Friday declared that China and other G-20 member nations had reached an agreement to offer debt relief to the International Development Association (IDA), a group to which Nigeria belongs.
Mr Malpass made the announcement during a joint press conference at the World Bank Group/IMF 2020 virtual Spring Meetings in Washington.
According to the latest report by the Debt Management Office, released on 30th March, Nigeria’s indebtedness to the IDA as of the end of last year was over $9.692 billion.
“IDA countries will have bilateral debt relief beginning May 1. That way, they can concentrate their resources on fighting the pandemic and its economic and social consequences.
“I take note that in the G-20 meetings, China is supporting the international agreement to allowing moratorium of debt repayments by IDA countries if they ask for forbearance.
“That’s very important because China is one of the biggest creditors and their participation in that effort is important and was very welcome.”
Countries whose per capita income is below the current threshold of $1,175 are members of the IDA.
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Malpass noted that a mechanism would be put in place to track how developing countries deploy the funds made available by the debt relief.
“So if the government saves money by not paying creditors, there is an expectation that they use it for health, education, economic rebuilding, jobs and concrete ways to help the people of their country.
“There is also within the debt relief initiative, the idea that there will be monitoring and assessment of the debt sustainability of poor countries.
“That process itself will amount to transparency. That’s going to change the way that countries have been lending into the developing world and it will improve it substantially and there will be a big benefit even to the creditors.”
The process, according to him, would afford developing nations the chance to access additional grants and concessional loans.
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