- The International Monetary Fund (IMF) is hesitant to grant debt cancellation to Nigeria and other African countries
- The IMF said countries seeking debt cancellations should seek dialogue with individual creditor nations to fashion out the best options
- IMF's Africa representative, Abebe Selassie, urged African countries to work to minimise the impact of inflation in their respective countries
The International Monetary Fund (IMF) has dismissed the idea of total debt cancellation for Nigeria, Ghana, and other African countries.
The IMF African Department Director, Abebe Selassie, said about 50% of total debts in African countries are domestic, making debt cancellations difficult.
Nigeria's total debt stock skyrocketed
According to the Debt Management Office (DMO), Nigeria's total debt stock stands at N87 trillion as of June 30, 2023.
The IMF African Director stated there is no magic wand to wave and get rid of debts, saying there should be country-specific discussions on debt rescheduling.
Selassie said debts will be handled based on discussions with creditor nations on the way out of the challenges.
The Nation reports that Selassia revealed that where there is no rise in private investment and consumption, it is expected to lift growth in many parts of Africa by 2024.
IMF asks African countries to reduce inflation
Per the IMF Chief, Africa was remarkably subdued, and inflation is gradually declining.
Per Selassia, inflation in Africa remains high, and monetary and fiscal policies should work together to control it, stating that too many countries struggle to maintain growth and have sustainable jobs.
In the last decade, the agency had loaned about $80 billion to African countries for emergency funding and Special Drawing Rights (SDR) allocations.
As of September 2023, IMF's SDF to Nigeria is 2147.69 million; Special Drawing Rights (SDR): 3363.51 million; Quota (SDR): 2454.5 million.
In 2022, the IMF cautioned Nigeria and other developing countries against taking loans from China due to unfavorable loan conditions.
African countries increase the tempo of debt cancellation
Nigerian and other African countries are increasing their requests for debt cancellations within the G24 countries.
The G24 presented a series of proposals to the IMF and the World Bank at the ongoing IMF/World Bank meeting at Marakesh in Morocco.
The G24 members expressed their fears over developing countries' increasing public debt.
They stated that the countries need help with unsustainable debt, making it hard to meet their debt-servicing obligations.
Wale Edun, Nigeria's Minister of Finance and Coordinating Minister of the Economy, said the G24 statement urges efficient debt resolution mechanisms to support post-pandemic recovery.
Edun asked the G20 members to eliminate export restrictions on fertilizer and grains.
Debt Stock: Nigeria's most indebted geopolitical zones in 2022
The DMO earlier said Nigeria's total debt stock hit over N41 trillion as of March 2021.
The breakdown of the debt, tabulated by Legit.ng, shows that the various states in Nigeria contribute immensely to the national debt stock.
According to reports, Nigeria's total public debt stock rose from N39.56 trillion in December 2021 to N41.60 trillion, $100.07 billion in the first three months of 2022, January to March, the Debt Management Office (DMO) revealed yesterday.