Nigeria, others ask IMF, World Bank for debt relief

Nigeria and other developing nations are amplifying their request for debt relief within the G-24, an assembly of developing economies.

At the ongoing meeting of the International Monetary Fund (IMF) and World Bank in Marrakech, Morocco, the G-24, of which Nigeria is a member, presented a series of appeals.

The G-24 members voiced their apprehension regarding the escalating and substantial levels of public debt faced by numerous developing countries.

They emphasized that these nations are grappling with unsustainable debt, making it challenging for them to meet their repayment obligations.

The members of the G-24 while acknowledging the G-20 Common Framework, which is a debt relief initiative by the Group of Twenty (G-20) countries, noted that some of the poorest and most vulnerable countries are not benefiting from this debt relief programme.

They therefore called for a durable debt resolution specifically designed to address the debt problems of those excluded countries at the same time demanding for a more comprehensive and sustainable solution to alleviate the burden of debt for these countries and enable their economic growth and development.

Nigeria’s Minister of Finance and Coordinating Minister for the Economy Mr Wale Edun at the Africa Group 1 Constituency Meeting on the sidelines of the IMF/World Bank meeting stated that “our member statement urges an efficient debt resolution framework to support post-pandemic recovery and we indeed welcome Zambia’s debt restructuring agreement and call for swift resolution mechanisms for Ethiopia and Malawi.

The G-24 members also called for more concessional lending, especially for investments in global public goods and sustainable development such as affordable water and energy.

Wake Edun also called for the “elimination of export restrictions on fertilizer and grains, avoiding protectionist policies and leveraging the normalization of supply chains and shipping costs to reinvigorate global trade”.

At the G-24 meeting, Edun and other finance ministers expressed their concern with the progress on the IMF general quota review. IMF general quota refers to the monetary contribution made by each member country to the International Monetary Fund (IMF).

This quota determines the country’s relative financial and voting power in the institution. The quota is assessed based on each member country’s share of the world economy, including its GDP, openness to trade, and international reserves.

The IMF uses the general quota to fund its lending activities and to provide financial stability to member countries facing economic difficulties. It also plays a vital role in decision-making processes regarding policies and strategies for the organization.

Wale Edun and his fellow finance ministers reiterated their call for the IMF “to remain a quota-based institution in order to bolster the voice and representation of the emerging market and developing economies, who now account for a larger share of world GDP”.

Credit: The Nation