In a gesture aimed at relieving Nigeria and other members of the International Development Association (IDA) of their mounting debt burden, the World Bank and the International Monetary Fund (IMF) Wednesday issued a joint statement, ordering bilateral creditors to put debt repayment obligation of such countries on hold.
A thoughtful intervention by all standards, the suspension is a considerable respite for Nigeria, which spends more than 60% of its income servicing debt every year.
“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty,” the statement from Washington said.
The international lenders adopted the forbearance measure, where economies might find it hard to access fund for developmental and medical purposes as long as the outbreak lasts.
“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 international community would welcome G20 support for this Call to Action,” the international lenders said.
Nigeria’s exposure to Washington-based World Bank alone grew 15.3% in the twelve-month period from September 2018 to September 2019 as public debt rose from $8.51 billion to $9.81 billion, the statistics office said in January.