President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba has joined the clamour for debt relief for Nigeria from multilateral institutions, noting that this becomes inevitable under the current circumstances imposed on global economies, specifically, the novel coronavirus pandemic.
Justifying the need for debt forgiveness, Wabba said, “The response of the International Monetary Fund (IMF) in providing debt relief service to 25 poor countries could not have come at a better time.
At its Executive Board Meeting held on April 13, 2020, the IMF announced that the gesture channeled through its revamped Catastrophe Containment and Relief Trust (CCRT) is targeted at addressing the impact of the Covid-19 pandemic.
Last week, the World Bank also announced plans to roll out US$160 billion in emergency aid to countries impacted by the Corona virus including US$14 billion in debt repayments to governments owed by 76 poor countries.”
The NLC boss however said it was disheartening to note that Nigeria was excluded from the list of benefitting countries announced by IMF.
“We call for the inclusion of Nigeria in the beneficiary list for the COVID-19 related debt relief and debt moratorium based on very cogent reasons.”
According to Wabba, “Nigeria is facing a dire economic crisis given the recent plunge in the price of crude oil, Nigeria’s major foreign exchange earner. This has already led to the downsizing of the capital expenditure in the 2020 national budget.
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Second, in December 2019, Nigeria’s external debt hit a 16 year high of US$27 billion with a debt servicing commitment of US$1.5 billion.
The fact that Nigeria’s debt servicing is about 5% of our 2020 federal budget and 75% of our external reserves signpost that our debt servicing pledges are impracticable and should be re-negotiated.”
“The Nigeria Labour Congress completely aligns with the position of the International Trade Union Confederation (ITUC) and other international non-governmental organisations which warned that failure to address the debt and financing needs of developing countries could trigger large scale loss of lives and livelihoods. This could be the harbinger of the collapse of the global social and economic order.”
The labour leader’s appeal is coming on the heels of strident calls made by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed during the Development Committee Plenary of the 2020 Virtual Spring Meetings of the World Bank Group and the International Monetary Fund (WBG/IMF).
Addressing the Meetings, she welcomed the agreement of the G20 on the debt service moratorium for poorer countries, stressing that the continent commended both President David Malpas and Ms. Kristalina Georgieva, for their call for immediate debt relief in order to create fiscal headroom for poor countries, and also urges all creditors including multilateral and bilateral creditors, Paris Club and commercial creditors to participate in this important initiative.