A week after receiving $3.4 billion from the International Monetary Fund (IMF), President Muhammadu Buhari has requested that international financial institutions should waive debt obligations of Nigeria, others.
President Buhari said considering the impact of the Coronavirus pandemic, the debt obligations of member states should be cancelled to assist nations struggling with the economic impact of the COVID-19.
He made this request during a virtual summit with other heads of states from the Non-Aligned Movement (NAM). The movement comprises of 120 developing world states that are not formally aligned with or against any major power bloc. It is the largest grouping of states globally after the United Nations.
During the summit titled "United Against COVID-19 Pandemic", President Buhari called for an “outright debt cancellation,” a report by Bloomberg disclosed. This, he believes will cushion the fallout from the virus which has led to a global economy shutdown.
The COVID-19 pandemic has led to countries restricting movement and shutting down business activities. Nigeria was among the country that announced a lockdown. Nigeria, only recent, began to relax the lockdown, allowing business activities to resume after over a month of closure. Nigeria has 2338 confirmed cases of COVID-19.
President Buhari's request for the cancellation of debt obligations due to the Coronavirus impact on economy is understandable considering Nigeria's debt level with multilateral lenders pre-coronavirus.
World Bank Group tops the list with $10.1 billion, Beijing-based Export-Import Bank of China is second on the list with loans totaling $3.2 billion, while Eurobonds account for a total $10.86 billion or 39% of external debt.
And with the Finance Minister, Zainab Ahmed, stating in April that Nigeria is seeking to unlock funds from multilateral and bilateral creditors to battle COVID-19, there's a probability that the $3.4 billion recently obtained from IMF won't be the last.
So, with COVID-19 compelling Nigeria to seek for more credit from international financial institutions, there's need to lobby for cancellations of debt obligations.