Nigeria gets debt relief from China, G-20

Nigeria gets debt relief from China, G-20

- China and the G-20 have granted debt relief to Nigeria and other poor countries

- With this, countries can concentrate their resources on fighting the pandemic and its economic and social consequences

- Meanwhile, a system will be set up to monitor how developing countries utilise the funds made available by the debt relief

Following the devastation caused by the coronavirus pandemic, China and G-20 countries have agreed to give debt relief to the poorest countries in the world which are classified as IDA countries by the World Bank.

This was disclosed by David Malpass, the World Bank president, on Friday, April 17.

It was disclosed at the ongoing virtual April 2020 virtual Spring meetings of the World Bank and International Monetary Fund.

“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,” he said.

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“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.”

According to The Cable, countries under the International Development Association (IDA) are those with per capita income below an established threshold. The 2020 threshold is $1,175.

Countries, such as Nigeria and Pakistan, are IDA-eligible based on per capita income levels and are also creditworthy for some IBRD borrowing. They are referred to as ‘blend’ countries.

Going further, he said a system will be set up to monitor how developing countries utilise 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,” he said.

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“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.

“It’s not the best system for creditors to be making non-transparent loans into poor countries and this is going to improve the system.”

Meanwhile, had reported that Nigeria’s minister of foreign affairs, Geoffrey Onyeama, has said the country does not have the capacity and resources to bring back Nigerians in the diaspora who want to come home immediately due to the coronavirus pandemic.

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Globally, many people including Nigerians are stranded in various countries not of their origin due to the lockdown in most of the world's major cities.

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“We just don’t have the capacity and resources to absorb all of them immediately, so we would have to probably do it in stages.

“Some people are of the opinion that tests should be carried out before they leave. We know in some countries it is difficult to get testing done, but hopefully, we would be in a position to start sending out planes in a matter of days,” he told Channels Television.

He also said, “We have to make provision for isolation centres for them in Nigeria here, where they would be isolated for 14 days.”

“We have about 2,000 Nigerians who want to come back. They’re those in the U.S., UK, United Arab Emirate, China and (we have) 200 in Sudan, as well as students,” he added. ( -> We keep evolving to serve our readers better.

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