Friday, April 12Inside Business Africa

NLC seeks debt pardon, moratorium from development agencies

The Nigeria Labour Congress (NLC) has advocated that Nigeria should be included in the list of countries that should benefit from debt pardon and moratorium.

NLC President Ayuba Wabba who disclosed this in Abuja said the world has never experienced such disruption to health and economy as presented by COVID-19 and called for unity to tackle the challenge.

He said the virus has pushed many countries into a desperate search for funds to cope with rising health emergencies especially with regards to the supply of life supporting medical equipment, protective kits and drugs.

The response of the International Monetary Fund (IMF) at providing debt relief service to 25 poor countries could not have come at a better time, Wabba said.

At its executive board meeting on April 13, 2020, the IMF announced that the gesture, channeled through its revamped Catastrophe Containment and Relief Trust (CCRT), is targeted at addressing the impact of the pandemic.

Last week, the World Bank also announced plans to roll out US$160 billion in emergency aid to countries impacted by the coronavirus including US$14 billion in debt repayments to governments owed by 76 poor countries.

Wabba said: “We call for the inclusion of Nigeria in the beneficiary list for the COVID-19 related debt relief and debt moratorium based on very cogent reasons. Nigeria is facing a dire economic crisis, given the recent plunge in the price of crude oil, Nigeria’s major foreign exchange earner. This has already led to the downsizing of the capital expenditure in the 2020 national budget. 

“Second, in December 2019, Nigeria’s external debt hit a 16-year high of US$27 billion with a debt servicing commitment of US$1.5 billion. The fact that Nigeria’s debt servicing is about 5 per cent of our 2020 federal budget and 75 per cent of our external reserves is a signpost that our debt servicing pledges are impracticable and should be re-negotiated. 

“Nigeria is the most populous country in Africa and is a major regional transportation hub. The implication is that a population as large as Nigeria’s with very active citizens could be a major epicentre for future global waves of COVID-19 if very robust and adequate support is not extended to Nigeria to fight and contain the coronavirus pandemic.”

NLC added: “We also believe that the current difficulties instruct our government to always keep a healthy debt profile that can withstand the evil day. While we learn our lessons, we must halt COVID-19. We must re-start our economy. We must pay for essential goods and services. We must recover jobs and income. We must save lives, and we must live again.”

Source: Guardian

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