COVID 19: FG, Others Beg IMF, W/Bank To Cancel Debt

By Fola James

Nigeria and other African countries are demanding debt forgiveness and bailout worth over $140 bn from IMF, World Bank and other rich western nations to cushion the effects of the novel corona virus on their people.

Except these international bodies come quickly to the rescue, hunger, deaths and disease loom in the continent, African leaders have said.

This is the resolution of Finance Ministers across Africa, at a meeting held recently under the auspices of the Economic Commission for Africa, ECA.

The continent is currently struggling to contain the impact of the deadly disease, which, the World Health Organisation say could kill over 240,000 people across the world.

The virus has spread to a dozen of countries in the continent, with over 6,400 persons already tested positive and 229 deaths recorded so far, WHO said.

Affected countries in the continent have taken some proactive measures, including stay-at-home order, which has largely stopped people from going to work, experts say, warning of serious impact on many struggling economies, most especially those that depend on hands-out from rich countries to survive.

The only way to save the continent from imminent economic collapse is for Europe and other rich countries in the West to restructure or allow outright debt forgiveness for many African nations, the ministers said.

The continent is now seeking economic stimulus package worth $100bn, aside plea to creditor bodies such as the International Monetary Fund, IMF, World Bank and other development partners to waive $44bn interests on debts in 2020.

“Africa needs an immediate emergency economic stimulus to the tune of US$100 billion. As such, the waiver of all interest payments, estimated at US$44 billion for 2020, and the possible extension of the waiver to the medium term, would provide immediate fiscal space and liquidity to the Governments, in their efforts to respond to the COVID-19 pandemic,” the ministers said at the meeting attended by Zainab Ahmed, Nigeria’s Finance Minister.

There are already strong indications that many countries in the Africa are not likely to meet their projected revenue for the year, this could affect spending on critical infrastructures and social buffers for the poor, analysts say.

For instance, Nigeria’s 2020 Budget is benchmarked on $56 per barrel of crude oil; the price of the commodity has now dropped to $19 per barrel, as a result of spike of the corona virus pandemic across the world, which has seen big economics shut production, leading to less demand for the product.
Many countries in Africa will not survive the shock except something is done quickly,” Jacob Ibiyemi, an economic expert say.

According to the Ministers “without coordinated efforts, the COVID-19 pandemic will have major and adverse implications on African economies and the society at large.

Original economic forecasts in most economies are on average, being downgraded by 2-3 percentage points for 2020 due to the pandemic.”