"N87 Trillion Debt:" IMF Offers Nigeria, Other African Countries Conditions For Debt Forgiveness

"N87 Trillion Debt:" IMF Offers Nigeria, Other African Countries Conditions For Debt Forgiveness

  • The International Monetary Fund (IMF) is proposing a debt swap deal to Nigeria and other debtor countries around the world
  • The IMF MD, Kristalina Gerogieva, said the agreement had not been concretised yet but offers hope for debt relief
  • Nigeria's president, Bola Tinubu, recently asked the National Assembly to approve another $8.6 billion

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

The International Monetary Fund (IMF) is mulling the establishment of a debt-for-climate swap deal scheme to help debtor countries, including Nigeria, reduce their indebtedness while promoting environmental efforts.

The managing director of IMF, Kristalina Georgieva, revealed this during an interview with media representatives at COP28, stressing that the body has yet to finalise a concrete mechanism for the debt-for-climate swap deal.

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IMF, Debt for climate deal
President Bola Tinubu and IMF Managing Director. Kristalina Georgieva Credit: Bloomberg / Contributor
Source: Getty Images

IMF says some countries are on the verge of debt distress

She said:

"Decarbonization poses significant challenges for nations with substantial debt burdens. Climate change and debt are two interrelated issues confronting these countries. Debt-for-climate swaps hold great promise for us."
"We haven't reached that stage yet, but we're actively considering it."

The IMF boss highlighted that the number of countries experiencing debt stress is small, but the number of countries close to debt distress is higher.

According to her, the IMF expects a one percent rise in the levels over the next few years.

Leadership reports that the IMF boss revealed that the fund boosts the attractiveness of developing countries and emerging economies for private capital by removing investment obstacles and providing fiscal space, letting the public sector prevent the risks associated with private investment.

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Private sector to leverage on a debt-for-climate swap deal

The IMF helmswoman revealed that the fund offers concessional loans that can be used to woo the private to invest in infrastructure.

The proposed deal by the IMF will provide some relief for developing nations severely affected by the rise in global food and energy prices and struggling to balance development needs in healthcare and education with climate action.

Analysts believe African countries seeking debt forgiveness can leverage the initiative to boost climate funding by tabling their offer immediately after finalizing the deal.

Tibubu seeks fresh $8.6 billion loan

Legit.ng reported that Nigeria's external debt profile will hit close to N100 trillion as President Bola Tinubu, on Tuesday, November 28, 2023, asked for the approval of the National Assembly for a fresh $8.6 billion and 100 million euro foreign loan.

Tinubu's request is part of an external borrowing plan for 2022-2024 for essential infrastructure, such as power, roads, water, railways, and health.

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Nigeria currently owes N87.379 trillion

Data from the Debt Management Office reveals that Nigeria's external debt has crossed the N87 trillion mark, as domestic debt stands at N54.130 trillion.

A breakdown of Nigeria's multilateral borrowing consumed $20.790 billion, bilateral at $5.518, commercial at $15.618 billion, Promissory notes at $931 million and $300 million, respectively.

As of June 2023, domestic and external, the country's total public debt is N87.370 trillion.

AfDB to disburse $1 billion to Nigerian, other entrepreneurs to tackle climate change

Legit.ng reported earlier that to combat climate change, the African Development Bank (AfDB) and the Global Centre on Adaptation (GCA) promised $996.6 million to boost young entrepreneurs in Africa.

GCA is a global organisation that prioritises climate change rapid change solutions.

AfDB revealed on its X, formerly Twitter, page that AfDB and GCA are launching the initiative to finance youth-led companies and start-ups across Africa.

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Source: Legit.ng

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