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COVID-19: AU ECOSOCC urges China, France, others to grant Nigeria debt forgiveness

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The Africa Union, Economic, Social and Cultural, AU ECOSOCC, Nigeria office, on Friday, urged China, France, Japan, and India to grant Nigeria debt forgiveness as other 25 countries were recently granted debt forgivenes as the novel Coronavirus, COVID-19, pandemic continue to ravage countries across the world.

This was contained in a statement signed by the Nigeria Representative, AU EC0SCCO, Oba John, while commending the Executive Board of the International Monitory Fund (IMF) for granting a debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.

Oba also expressed optimism that certainly this will further assist the benefiting countries to significantly cushion the impact of COVID- 19 on their economie.

He further explained why AU ECOSOCCO Nigeria deemed it necessary to appeal to China, France, Japan, and India the major Nigeria lenders to follow suit by also giving Nigeria debt relief or at most a two-year moratorium on all external-debt repayments, which this will give the Nigerian government the fiscal space needed to respond to the pandemic.

According to him Nigeria at this time need all the supports she can receive​ in order to enable her recover from the economic impact of the deadly COVID-19 pandemic, because it would 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 $1 trillion.

He also added that Nigeria will need China’s support now based on both countries’ long and fruitful bilateral relationship, which Nigeria’s debts of about $3.2 billion majorly are owed to China.

The statement reads in part, “We appeal to China, France, Japan, and India the major Nigeria lenders to follow suit by also giving Nigeria debt relief or at most a two-year moratorium on all external-debt repayments, this we believe will give the Nigeria governments the fiscal space needed to respond to the pandemic.

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“The Africa Union, Economic, Social and Cultural (AU ECOSOCC) Nigeria office is saying Nigeria at this time need all the supports it can get o enable it recover from the economic impact of the Corona Virus 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 $1 trillion.

“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 $138.8 million (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.

“As it stands today, Nigeria needs as much as $100 billion in financial support, because of sharp declines in commodity prices, trade, and tourism, as a direct result of the pandemic.

“While investor pullback from risky assets has pushed up the cost of borrowing in financial markets, limiting viable options for resource mobilization for countries like Nigeria.

“AU ECOSOCC Nigeria is therefore calling on the lenders to see the necessity of debt cancellation or at most debt payment restructuring.”

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