Why Nigeria is excluded from IMF debt service relief, list of countries to benefit

Why Nigeria is excluded from IMF debt service relief and list of countries to benefit
Ms. Kristalina Georgieva, MD, IMF

Contrary to the news making the rounds, Nigeria is not among the 25 countries that will benefit from the International Monetary Fund, IMF debt service relief because she is not among the nations owing the Fund.

The Managing Director of IMF, Kristalina Georgieva had announced that the Fund would provide $500 million in grant-based debt service relief to 25 countries.

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The novel Coronavirus is shutting down economies on a global scale, thereby sending different countries into emergency distress.

This has triggered a clamour for some relief in favour of the poorer nations even with Pope Francis lending his voice.

It is in the light of this that the IMF is relieving the nations in this category of their debts in order to help sustain and complement their efforts at reviving their economies.

“Today, I am pleased to say that our executive board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic,” said IMF’s Managing Director, Kristalina Georgieva.

The 25 beneficiaries include Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

According to Georgieva, the grant was provided to the poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months. She noted that the fund would help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

She urged donors to help the Fund replenish the Trust’s resources and boost its ability to provide additional debt service relief for full two years to IMF’s poorest member countries.

It would be recall that the IMF had disclosed the United Kingdom’s recent pledge of US$185 million as well as the US$100 million provided by Japan as part of the CCRT.

Nigeria’s exclusion from the list has become a topic of discussion in the media space, as many are already worried about the country’s debt portfolio and the unwillingness of international organisation to provide relief at this time of the Coronavirus pandemic.

The debt relief is expected to help countries move towards achieving the UN Millennium Development Goals, which aim at halving poverty by 2015. Debt in developing countries is singled out as a principal cause of poverty, causing human suffering and misery as well as hampering economic development.