IMF, World Bank suspend debt payments by Nigeria, others to ease economic burden over covid-19

London, March 26, 2020 (AltAfrica)-Amidst global economic crisis occassioned by the covid-19 pandemic, the International Monetary Fund and World Bank on Wednesday announced a hold on debt payments from Nigeria and other sub-Saharan Africa nations so help them ease the economic burden and battle the coronavirus pandemic.

IMF, World Bank suspend debt payments by Nigeria, others to ease economic burden over covid-19The two international creditors also call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. 

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“The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets,” the Washington-based development lenders said in a joint statement.

“The move aims to help countries that are home to two-thirds of the world’s population living in extreme poverty – largely in sub-Saharan Africa – and qualify for the most generous, low-cost loans from the International Development Association financed by wealthier nations,” it added.

“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries,” which will face “immediate liquidity needs to tackle challenges posed by the coronavirus outbreak,” the organisation said.

Nigeria is owing IDA $9.4m, according to the document released by the DMO in January 2020

The IMF and World Bank asked the Group of 20 nations to support the initiative for “all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

Among the bilateral creditors that Nigeria owes as of September 2019 are France (AFD) – $365.50m; Japan (JICA) – $76.52m; India (Exim Bank of India) – $29.59m; and Germany (KFW) – $211.45m.

In addition, the institutions called for an analysis of the financing needs these countries will face, and whether their total debt load is sustainable.

Part of the World Bank, the IDA is one of the largest sources of assistance for the world’s 76 poorest countries, providing zero or low-interest loans spread over 30 years or more, and grants to some distressed nations.

In the fiscal year ending June 30, 2019, IDA commitments totaled $22 billion, of which 36 percent was provided on grant terms, according to the World Bank, AFP reports.

Many states in Nigeria have tightened restrictions on places of worship, airports, borders, and bars as part of measures against coronavirus spread.

In Lagos State, Abuja, Osun and Ogun, churches, mosques, social gatherings, football viewing centres, and night clubs must restrict attendance to between 20 and 25 people.

The Nigerian Railway Corporation also suspended rail operations from Monday.

As of the time of filing this report, Nigeria had recorded 46 confirmed cases of coronavirus, with top government officials also being infected.

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