Daily Trust

‘Global ac­tion on debt-rid­den coun­tries cru­cial’

- From Sun­day Michael Ogwu, La­gos Business · Finance · World Finances · Economics · Infectious Diseases · Social Sciences · Health Conditions · International Monetary Fund · World Bank · Nigeria · Media Trust · United States of America · Ministry of Finance of the People's Republic of China

Speak­ers at the on­go­ing virtual an­nual meet­ings of the In­ter­na­tional mone­tary fund (IMF) and the World Bank have called for de­ci­sive ac­tions to ar­rest the grow­ing debt crises by low and de­vel­op­ing in­come coun­tries.

Speak­ing on the theme: “dif­fus­ing debt and cre­at­ing com­pre­hen­sive so­lu­tions,” the Di­rec­tor Gen­eral of the West African In­sti­tute for Fi­nan­cial and Eco­nomic Man­age­ment (WAIFEM), Pro­fes­sor Baba Yusuf Musa, said debt man­age­ment mat­ters right now be­cause de­vel­op­ing and emerg­ing economies are fac­ing new fi­nan­cial vul­ner­a­bil­i­ties and in­creased risk of debt dis­tress be­cause of the COVID-19 pan­demic which has trig­gered health, so­cial and eco­nomic crises.

Sta­tis­tics by the IMF and the World Bank sug­gests that more and more coun­tries are fall­ing into pre­car­i­ous debt made worse by the on­go­ing pan­demic.

Nige­ria’s eco­nomic growth is chok­ing un­der the huge bur­den of debt ser­vic­ing. As at the end of the first quar­ter of this year, to­tal pub­lic debt had risen to N28.63 tril­lion.

An anal­y­sis by Daily Trust sug­gests that it would take the coun­try at least three years of its cur­rent yearly bud­get size of N10trn to off­set the debt bur­den, with­out pay­ment of salaries and un­der­tak­ing projects of any sort.

Ac­cord­ing to fig­ures ob­tained from the Fed­er­a­tion and the Min­istry of Fi­nance, in the 2020 spend­ing plan, the sum of N3.52trn was re­leased for im­ple­men­ta­tion at the end of May 2020. Of the amount, the sum of N1.25trn was for debt ser­vic­ing; N1.32trn for per­son­nel, while a pal­try N253.33 bil­lion only was re­leased for cap­i­tal projects’ im­ple­men­ta­tion.

Musa said: “To avoid

crises and min­i­mize the neg­a­tive ef­fect of the pan­demic shock, it is nec­es­sary that mul­ti­lat­eral in­sti­tu­tions and re­gional de­vel­op­ment banks con­vert the loans pro­vided to grants and per­suade the pri­vate sec­tor to do the same.”

Pres­i­dent of the World Bank, David Mal­pass said, “We are in a crit­i­cal cir­cle with debt dis­tress more and more im­por­tant for a num­ber of coun­tries.

“I am wor­ried about a debt dis­tress sit­u­a­tion that would go on for a long time. We need to find ways to avoid that.”

The Ex­ec­u­tive Di­rec­tor of Ju­bilee USA Net­work, Eric Le Compte in his con­tri­bu­tion said debt mat­ters be­cause too many coun­tries were ill pre­pared to face the eco­nomic and health chal­lenge brought by COVIS-19.

He said low and mid­dle in­come de­vel­op­ing coun­tries are see­ing wor­ri­some in­creases in ex­treme poverty rate.

 ??  ?? From left: Mr. ‘Laoye Jaiye­ola, CEO, Nige­rian Eco­nomic Sum­mit Group (NESG); Prince Clem Agba, Min­is­ter of State, Bud­get and Na­tional Plan­ning;
Mrs. Zainab Ahmed, Min­is­ter of Fi­nance, Bud­get and Na­tional Plan­ning; Mr. Asue Igho­dalo, Chair­man, NESG; Mr. Shehu Shinkafi, Perm. Sec., Spe­cial Du­ties, Fi­nance at a brief­ing yes­ter­day in Abuja, for the 26th Nige­rian Eco­nomic Sum­mit hold­ing Oc­to­ber 26 and 27, 2020. Photo: NESG
From left: Mr. ‘Laoye Jaiye­ola, CEO, Nige­rian Eco­nomic Sum­mit Group (NESG); Prince Clem Agba, Min­is­ter of State, Bud­get and Na­tional Plan­ning; Mrs. Zainab Ahmed, Min­is­ter of Fi­nance, Bud­get and Na­tional Plan­ning; Mr. Asue Igho­dalo, Chair­man, NESG; Mr. Shehu Shinkafi, Perm. Sec., Spe­cial Du­ties, Fi­nance at a brief­ing yes­ter­day in Abuja, for the 26th Nige­rian Eco­nomic Sum­mit hold­ing Oc­to­ber 26 and 27, 2020. Photo: NESG

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