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COVID-19: Nigeria needs debt relief to overcome coronavirus, recession – NLC president begs IMF

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COVID-19: Nigeria needs debt relief to overcome coronavirus, recession - NLC president begs IMF

The Nigeria Labour Congress (NLC) has given reasons Nigeria should not have been excluded from the International Monetary Fund (IMF) list of countries to benefit from its debt relief as a result of the COVID-19 pandemic.

The IMF approved a $500m debt relief fund to 25 countries which are mostly African countries, with Nigeria excluded from the list.

The managing director of the IMF, Kristalina Georgieva in a statement, said it would provide grant-based debt service relief to the countries.

Countries enlisted to benefit from the relief according to the IMF include Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia.

Others are Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

Reacting, NLC President, Ayuba Wabba in the statement said that Nigeria needs all the support it can get as there is already brewing tension in Lagos and some states due to the lockdown order.

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Wabba appealed to the IMF to reconsider its decision, adding that even rich countries in Europe and America struggle as COVID-19 bites harder.

Giving reasons for requesting Nigeria’s inclusion, NLC highlighted the recent plunge in the price of crude oil, Nigeria’s major foreign exchange earner.

“The plunge in the price of crude oil has already led to the downsizing of Nigeria’s capital expenditure in the 2020 national budget.

“As at 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% of our 2020 federal budget and 75% of our external reserves signpost that our debt servicing pledges are impracticable and should be renegotiated,” Wabba said.

The NLC president further called for a temporary suspension of debt payments by developing economies, re-negotiation of debt obligations, and ultimately debt pardon by creditor countries in order to defeat COVID-19.

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“A population as large as Nigeria’s with very active citizens could be a major epicentre for future global waves of COVID-19 if adequate support is not extended to Nigeria to fight and contain the coronavirus pandemic.

“During the two weeks initial lockdown in Lagos, Ogun and the Federal Capital Territory (FCT), there were reports of increased tension, unrest and criminal activities in different parts of the country.

“The fact is that the dangers of a burgeoning constituency of the poor including the working-class poor are staring us hard in the face.

“We do not know how long this dam can hold. But we do know that Nigeria needs all the support it can get, including debt relief, moratorium, and pardon in order to enable the country to tide over the waves of COVID-19 pandemic,” the statement added.

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