Against the backdrop of Nigeria being exempted from the list of 25 countries to benefit from the IMF debt relief, economic experts have offered divergent views on why the country was not included on the list.
Georgieva had on Monday announced an immediate debt relief for 25 countries, most of which are in sub-Sahara. Africa. The beneficiaries are those considered poorest and most vulnerable member- countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the its response to help address the impact of the COVID-19 pandemic.
In an interview with LEADERSHIP yesterday, professor of finance and capital market, Uche Uwaleke, said that as the country with the biggest economy in Africa, Nigeria is certainly not qualified to be grouped with those the IMF called poorest and most vulnerable.
South Africa which is in the same category with Nigeria is not also on the list.
The special fund is meant to provide debt relief to member countries chiefly to cover their debt obligations to the IMF. Nigeria’s current public debt does not include obligations to the IMF. Based on that, the former Imo State commissioner for finance said that “there is no basis for including Nigeria among the countries to benefit from this gesture by the IMF.”
Nigeria broke free from the IMF since 2005 when the country negotiated a debt buy back arrangement which extinguished all obligations to them. Since then, the multilateral borrowings have been from the World Bank Group and the African Development Bank (AfDB).
On his part, Mr. Seye Adetumbi said that Nigeria’s exemption from the list means the situation of the country is ranked better or higher than those 25 countries.
In his perspective, economic analyst, Okey Inuegbu said that whether Nigeria had debt obligation to IMF or not, no multilateral institution, including World Bank and AfDB would grant debt relief to Nigeria because of the nation’s “very poor economic planning.”
“IMF, World Bank and AfDB watch our behaviour. I will be surprised if the IMF grants Nigeria debt relief. Most of the indices for Nigeria are negative, which means they need help. But in doing this, you have to ask, what did we use the borrowed funds for? You used the funds for things that do not help the populace. And most of the borrowed funds were used for personal luxuries,” Inuegbu said.
He noted that such debt pardon is based on independent analysis of a nation’s economic history with regards to the deployment of the loan facilities to ascertain whether Nigeria needs debt relief or not.
The countries that will receive the debt service relief are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.