Nigerian President Muhammadu Buhari. FILE PHOTO/NMG
The Shock Doctrine and the Post-Washington Consensus : When the IMF and World Bank use COVID 19 to squeeze African leaders into accepting Global structural Adjustment Programs : Consider debt relief for poor countries, Museveni tells donors
https://watchmanafrica.blogspot.com/2020/10/the-shock-doctrine-and-post-washington.html
When the IMF and World Bank cajole neo-liberal Uganda to Submit to Global Structural adjustments: Uganda debt reaches crisis levels as Uganda Debt Net work Boss Pleads for Debt Cancellation
https://watchmanafrica.blogspot.com/2020/09/when-imf-and-world-bank-cajoles-neo.html
Towards A New World Order? The Global Debt Crisis and the Privatization of the State: Has the Pandemic Been Used to Precipitate the World into a Spiral of Mass Unemployment, Bankruptcy and Despair?
https://watchmanafrica.blogspot.com/2020/04/towards-new-world-order-global-debt.html
Record-breaking $86bn debt leaves Nigerians stunned
https://www.monitor.co.ug/uganda/news/record-breaking-86bn-debt-leaves-nigerians-stunned-2458262
Tuesday October 06 2020
By The East African
Nigeria's debt of $85.9 billion, the highest in history, has become the talking point even as the country celebrated its 60th anniversary on October 1, 2020.
The pressure on the economy has caused an 8.31 per cent increase in debt owed from the total of $79.3 billion recorded in March. By December 2005, Nigeria was rated as one of the most heavily indebted countries, owing $33.9 billion.
Now the talk is on whether the money borrowed had helped or burdened the country.
Abuja’s debt obligation had gone down in 2006 after the country got debt relief. The Paris Club of creditors wrote off $18 billion of that debt, while the country paid off the balance and became largely debt-free.
However, in the years that followed, the public debt spiraled as officials argued for funding budget deficits and critical infrastructure.
According to the National Bureau of Statistics, 34.89 per cent of the total federal and state public debt is external while domestic accounts for 65.11 per cent.
The Debt Management Office (DMO) reported that the increase by $6.593 billion was accounted for by the $3.36 billion budget support loan from the International Monetary Fund, new domestic borrowing to finance the revised 2020 Appropriation Act, including the issuance of Sukuk, and Promissory Notes issued to settle claims of exporters.
Mortgaged future
The nation’s 2020 Appropriation Act had to be revised in the face of the adverse impact of Covid-19 on revenues and increased expenditure needs on health and economic stimulus amongst others, DMO explained.
In spite of DMO’s reasoning, some stakeholders are concerned that Nigeria remained dependent on oil as the sole revenue-generating resource for such a long time without diversification to other revenue generating sources.
Former Vice President Atiku Abubakar raised the stakes when he accused government of mortgaging the future of Nigerians and having nothing to show for amassing such debt.
“Nigeria’s sovereignty may have been traded for foreign loans and God forbids our inability to service those loans, the lender country would take ownership of choice infrastructure on the Nigerian soil,” he said.
President of the Progressive Shareholders Association of Nigeria, Boniface Okezie, says the debt stock is cause for worry due to the government’s declining revenue.
Disagreeing with critics, Information and Culture minister, Lai Mohammed, said the ratio of debt to GDP was one of the lowest in the world at 19 per cent as at December 31, 2019.
Unlike in the past when the nation borrowed to “service the crass indulgence of a few fat cats”, the loans being obtained by the current administration were being primarily used to finance infrastructure — roads, railways, bridges and power.
He added that the loans also were long-term in nature, which would benefit present and future generations.
President Muhammadu Buhari on September 28, at a virtual meeting with Presidential Economic Advisory Council, justified the borrowing.
IMF approves aid for world's 28 poorest countries
https://www.monitor.co.ug/uganda/news/imf-approves-aid-world-s-28-poorest-countries-2458274
Tuesday October 06 2020
By AFP
The International Monetary Fund on Monday approved new emergency aid for 28 of the world's poorest countries to help them alleviate their debt and better cope with the impact of the coronavirus pandemic.
The announcement, which follows a similar measure passed in mid-April for 25 countries, is intended to help the countries cover their debt repayments to the IMF for the next six months and "free up scarce financial resources for vital emergency medical and other relief efforts" during the pandemic.
The 28 countries receiving the second tranche of aid are Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mozambique, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, the Solomon Islands, Tajikistan, Tanzania, Togo and Yemen.
Mali is also eligible for aid but has not yet been added to the list because "there is a lack of clarity as to whether the international community recognizes/deals with the current military regime as the government of Mali," the IMF said.
The debt relief is channeled through the Catastrophe Containment and Relief Trust (CCRT), which enables the IMF to provide grants to the poorest and most vulnerable countries hit by a natural disaster or public health crisis.
Subject to sufficient resources in the CCRT, grants could be provided for a two-year period through mid-April 2022 for an estimated total amount of $959 million.
The IMF's goal is to endow the CCRT with $1.4 billion so that it can also meet future needs.
To date, $506.5 million has been contributed by several countries, including the United Kingdom, Japan, Germany, the Netherlands, Switzerland, Norway, China, Mexico, Sweden, Bulgaria, Luxembourg and Malta.