Why IMF excludes Nigeria from $785m debt relief for 25 countries

* Grants meant for IMF’s poorest, most vulnerable members for 6-month debt obligations

* Fund projects Nigeria’s economy will shrink by 3.4 percent in 2020
Isola Moses | ConsumerConnect
At a critical time of the pressing need for several economies in the world to rebound, following the general downturn occasioned by the Coronavirus (COVID-19) disease, the International Monetary Fund (IMF) has excluded Nigeria from the list of 25 countries it granted $785 million debt relief recently.

It was learnt that Kristalina Georgieva, Managing Director of IMF, had approved immediate debt relief to the 25 of its member countries under the revamped Catastrophe Containment and Relief Trust (CCRT).

IMF in a statement said: “The CCRT can currently provide about $500 million in grant-based debt service relief, including the recent $185 million pledge by the United Kingdom and $100 million provided by Japan as immediately available resources.”

The beneficiary countries are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau and Haiti.

Others are Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.

Georgieva stated that “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.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

“The CCRT can currently provide about $500 million in grant-based debt service relief, including the recent $185 million pledge by the United Kingdom and $100 million provided by Japan as immediately available resources.

“Others, including China and the Netherlands, are also stepping forward with important contributions,” added the statement.

The Fund urged other donors to help in replenishing the Trust’s resources and boosting further its ability to provide additional debt service relief for a full two years to poorest member countries.

Meanwhile, International Monetary Fund has projected that the Nigerian economy will contract by 3.4 percent in 2020, face its worst recession in 30 years, while recording 2.4 percent growth in 2021.

ConsumerConnect gathered that IMF Tuesday, April 14 predicted that Nigerian economy would contract by 3.4 percent this year, just as the impact of distressing COVID-19 pandemic hits the country and other commodity exporting countries globally.

According to the Fund, the nation’s economy, however, will by 2.4 per cent in 2021.

This forecast is contained in the World Economic Outlook released at the ongoing virtual meeting of the IMF/World Bank Spring Meetings in Washington D.C., United States.

Gita Gopinath, IMF Chief Economist, in her address at the meeting, stated that the world has changed ‘dramatically’ in the three months since its last update of the World Economic Outlook in January 2020.

Gopinath said: “A rare disaster, a Coronavirus pandemic, has resulted in a tragically large number of human lives being lost.

“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown.”

The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes,” she declared.

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