Nigerian government has said that it will benefit from the debt relief to be granted by the G20 on Wednesday to International Development Association countries.
The G20 is an international forum, formed in September 1999, for the governments and central bank governors from 19 countries and the European Union.
There had been talks about Nigeria’s beneficiary status in the debt relief package approved by G20, but the government of the most populous black nation confirmed on Saturday that it would benefit by virtue of its classification among the World Bank’s IDA countries.
It is also expected that Nigeria will receive the same temporary suspension of debt from China in respect of bilateral loans from the Asian country.
China is in agreement with the G20 position and calls for the suspension of debt servicing for a considerable time in view of the health and economic challenges confronting poor and developing countries in the fight against the coronavirus disease.
President of the World Bank, David Malpass, said at the ongoing April 2020 Virtual Spring Meetings of the World Bank and the International Monetary Fund on Friday, “I take note that in the G20 meetings, China is supporting the international agreement to allow moratorium of debt repayments by IDA countries if they ask for forbearance.
“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.”
IDA is an international financial institution that is a part of the World Bank that helps the world’s poorest countries. It offers concessional loans and grants to the world’s poorest development countries with per capita income below an established threshold. The 2020 threshold is $1,175.
Commenting on the development, Media Adviser to Nigeria’s Minister of Finance, Yunusa Abdullahi, said, “We have some IDA loans with the World Bank and some bilateral loans from China. Yes, we will benefit to the extent that the principal and interest repayments falling due, which, to our understanding, is a debt service suspension, not forgiveness, until the end of 2020.
“The benefit for Nigeria will be the fiscal space created through debt rescheduling and interest payments which we are obligated to countries such as China and the World Bank.”
Malpass stated that the World Bank would set up a system that would free up funds and deploy them appropriately towards healthcare and social welfare packages.
“If 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 poor of their country,” he submitted.