Nigeria Won’t Seek Debt Relief from IMF – Finance Minister

By Tony Obiechina, Abuja

The Minister of Finance, Budget and National planning, Mrs. Zainab Ahmed on Tuesday announced that Nigerian Government has no intention of seeking debt relief from the International Monetary Fund (IMF).

Mrs Ahmed made this known during the public presentation of the 2021 budget in Abuja.

Overtime, Nigeria’s debt stock has increased from N28.628trn ($79.303bn) as of March 31, 2020 to N31.009trn ($85.897bn) by June 30, 2020, according to data obtained from the Debt Management Office.

The increase in the debt stock by N2.381trn or $6.593bn was accounted for by the $3.36bn Budget Support Loan from the IMF new domestic borrowing to finance the revised 2020 Appropriation Act including the issuance of the N162.557bn Sukuk, and Promissory Notes issued to settle claims of exporters.

The International Monetary Fund had approved a second debt service relief of six months for 28 low income countries.

The Washington based lender said in a statement that the approval was made by it’s Executive Board on October 2, 2020.

The moratorium granted under the Catastrophe Containment and Relief Trust, would help the benefiting countries concentrate on fighting the economic impact of the Covid-19 pandemic.

Africa has the highest number of those benefiting with about 18 countries eligible for the six-month debt service relief.

The IMF stated that the debt service relief covers the period October 14, 2020 through April 13, 2021.

The multilateral lender had on April 14 this year approved the first six-month relief which lasted between April 14 to October 13, 2020.

The approval made in April enables the disbursement of grants from the CCRT for payment of eligible debt service which will be due to the IMF from October 14, 2020 to April 13, 2021, worth $227m.

However, asked whether the federal government would consider applying for debt relief, the finance minister stated  that the government is not considering such option at this time.

She said currently, several loan agreements have been entered with various lenders adding that asking for debt relief would portend Nigeria as a country that cannot repay it’s indebtedness in the eyes of its creditors.

The IMF hopes the relief on debt service will free up scarce financial resources for vital emergency medical and other relief efforts as the impact of the pandemic inflicts economic pressure on the members.

Following the approval of the first relief, the IMF launched an urgent fundraising effort that would enable the CCRT to provide relief on debt service for up to a maximum of two years, while leaving the CCRT adequately funded for future needs.

The relief requires $1.4bn, however, donors have provided grant contributions totaling about $57.7m.

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