Africa Union Economic, Social and Cultural Council, AU-ECOSOCC, has appealed to China, France, Japan, and India, among other major Nigeria lenders to give the country debt relief or at most a two-year moratorium on all external-debt repayments.
The Council noted that this would give the Nigerian government the fiscal space needed to respond to the coronavirus pandemic currently ravaging the world.
It particularly commended the Executive Board of the International Monitory Fund, IMF for granting a debt service relief to 25 of its member countries under the revamped Catastrophe Containment and Relief Trust, CCRT as part of the Fund’s response to help address the impact of the COVID-19 pandemic.
Representative of the AU-ECOSOCC Nigeria, Mr. Oba John Adebusuyi, in a statement made available to our correspondent in Abuja, noted that such action would further assist the benefiting countries to significantly cushion the impact of COVID- 19 on their economies.
According to the Council, “Nigeria at this time need all the supports to enable it recover from the economic impact of the coronavirus pandemic as it will be very hard to service the debts in the face of the economic realities imposed by the virus, which according to the United Nations will set the world back by some $1trillion.”
It particularly said Nigeria will need China’s support at this very time, with the long and fruitful bilateral relationship between both countries which has led to Nigeria owning majority of its debts of about $3.2 billion to China.
“China must also consider Nigeria faithfulness in payment of it servicing charges as record has it that Nigeria in 2019, paid $138.8million (N53.7 billion) to the EXIM Bank of China in debt servicing and settlement, the highest amount paid to any bilateral institution for the year.
“With inflation rate of 13.4% and lower oil price which account for Nigeria major revenue generation, the G20 must as a matter of importance grant Nigeria a two-year standstill on all external-debt repayments, both interest and principal and an undertaking a comprehensive debt-sustainability assessment and considering further debt restructuring, where appropriate, to preserve or restore debt sustainability.
“And considering that the virus started in China, this we believe would give China detail understanding of how hard it is for Nigeria currently to cope with the effect of the pandemic on it economic, especially with the recent IMF prediction that Nigeria will slip into its biggest economic recession in 33 years.
“It is no more news that combating COVID-19 will be more challenging in Nigeria than in other parts of Africa, considering the huge population, poor access to quality health care, lack of access to clean water and the many millions of workers whose livelihoods are in jeopardy because of the lockdown which has hamper their opportunities to maintain basic daily incomes.
“As it stands today, Nigeria needs as much as $100billion in financial support, because of sharp declines in commodity prices, trade, and tourism, as a direct result of the pandemic,” the AU-ECOSOCC Nigeria stressed.
It added that while investors’ pullback from risky assets has pushed up the cost of borrowing in financial markets, limiting viable options for resource mobilization for countries like Nigeria.
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