In response to a recent request from President Muhammadu Bukhari for European countries to provide debt relief to African countries, Twitter user Mani Uto said that debt relief has already been provided to African countries and has been extended until 2022. This means that the president Bukhari has made an unnecessary request to the international community.
Sentence: Misleading. The claim that debt relief has been granted to African countries, with the exception of Nigeria, is misleading. Debt service was granted and no debt cancellation was made. Nigeria has rejected proposals to suspend debt service.
Even private creditors holding commercial debt and some countries have not been involved in debt relief for Africa. Although some multilateral and bilateral creditors, including the G20, have given some African countries debt suspension, President Bukhari has argued for a final debt cancellation for Africa.
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Twitter user Uto, through his @BrosManney handle, violated President Bukhara’s debt relief appeal, saying African countries had already benefited from debt pardons.
He said debt relief for Africa has also been extended.
“Who wrote Bukhari’s speeches? Debt relief has been granted to African countries, extended until 2022,” he said.
Describing the international community’s demand for debt relief for Africa as “disgraceful”, Uto said Nigeria was excluded from debt relief.
Nigeria “has been excluded due to the huge direct payments to civil servants by ministers and CEOs of ministries, departments and agencies without any management consequences,” he said.
Bukhari’s request to European countries
President Muhammadu Bukhari attended the recent African Summit on Financing in Paris, France, where he called on European countries and multilateral lenders to consider the restructuring of African debt portfolios as a full relief to help them cope with the effects of the COVID-19 pandemic.
Speaking in Paris on “External financing and debt treatment”, Bukhari said that the fall in commodity prices as COVID-19 takes away the global economy, further slows growth in some countries and strains healthcare facilities.
He was quoted in a statement by his senior special assistant for media and publicity, Garba Shehu, as saying: “In this spirit, we want the support of the French government with its influence in the European Union to give its voice to the efforts made. to mobilize additional resources for emerging economies, especially Africa, to increase investment in our economies.
In the meantime, is it true that debt relief has already been granted to Africa, which means that President Bukhari’s request is unnecessary?
Check
Misheck Mutize, a professor of finance at the University of Cape Town, explained that the debt relief package has been approved by some of the world’s largest lenders for more than 25 African countries.
The agreement includes the World Bank, the International Monetary Fund, the G20, the African Development Bank and all creditors of the Paris Club.
Mutize explained that the goal is to release more than $ 20 billion that governments can use to support their health services.
For example, on April 1, 2021, the Executive Board of the International Monetary Fund (IMF) approved the third tranche of a debt relief grant for 28 member countries under the Disaster Reduction and Assistance Fund (CCRT).
This approval followed two previous tranches, approved on 13 April 2020 and 2 October 2020 respectively.
A statement issued by the IMF on April 5, 2021, clarified that the debt relief facility will allow “the payment of CCRT grants to repay all eligible debt services that have fallen due to the IMF among the poorest and most deprived. vulnerable members from April 14, 2021, to October 15, 2021, estimated at 168 SDRs ($ 238 million).
The Fund disclosed that, with sufficient resources in the CCRT, the debt relief facility could be granted for the remaining period from 16 October 2021 to 13 April 2022, amounting to a total of around 680 SDRs (USD 964).
However, in addition to debt relief for some African countries, the African Economic Outlook for 2021 christens “From Debt Resolution to Growth: The Road to Africa”, Dr. Akinwumi Adesina, President of the African Development Bank Group. called for ‘one last comprehensive debt relief for Africa. “
“The time for a final debt relief for Africa is now. But such relief will require African countries to commit firmly to their share of the deal through bold governance reforms to eliminate all forms of public resource leakage, improve domestic resource mobilization and improve transparency, including on debt and in the sector. of natural resources, “Adesina said in a report published in March 2021.
He explained that the G20 is working for a global partnership to support temporary debt relief for developing countries through the Debt Relief Initiative.
“However, debt payments are being postponed and the initiative covers only a small part of Africa’s total bilateral debt,” he said.
Similar to Adeshina’s call for a comprehensive last debt relief for Africa, Mutize explained that some experts “are calling for a permanent debt cancellation to reduce the debt burden on African countries as they emerge from the COVID-19 pandemic crisis. countries will have high public debt as they use all available credit lines to provide resources to combat the pandemic. “
Mutize noted that private creditors holding commercial debt were reluctant to participate in debt relief as they “criticized the G20’s call for a freeze on all debt repayments”.
However, President Garba Shehu’s official spokesman posted on his Twitter account @GarShehu that President Bukhari had said at the summit that Africa needed “full relief” and not just relief for some African countries.
“According to him, many African countries have already experienced debt and the suspension of the debt service by France and the G20 does not go far enough,” Shehu wrote on Twitter.
On the claim that Nigeria was excluded in debt relief granted to Africa, the Daily Trust on Sunday recalled that in October 2020, the federal government refused dismissals from the IMF to suspend debt service.
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The Minister of Finance, Budget and National Planning, Ms. Zainab S. Usman, announced the decision of the Federal Government to reject the debt relief of the public presentation of the budget proposal for 2021 – a breakdown and focus held in Abuja.
Similarly, in April, the World Bank Development Committee and the G20 finance ministers endorsed the Debt Relief Initiative (DSSI) in response to a call by the World Bank and the IMF to provide debt relief to the poorest countries. to help them manage the severe impact of the COVID-19 pandemic.
But the federal government says the risks of debt relief now far outweigh the potential benefits. “No, we do not accept the World Bank’s debt relief proposal,” the minister said when asked.
Conclusion
The claim that debt relief has been granted to African countries, with the exception of Nigeria, is misleading.
Debt service was granted and no debt cancellation was made.
Nigeria has rejected proposals to suspend debt service. Even private creditors with commercial debt and some countries have not been involved in debt relief for Africa.
Although some multilateral and bilateral creditors, including the G20, have given some African countries debt suspension, President Bukhari has argued for a final debt cancellation for Africa.
This was in line with Dr. Adezina’s recent call for “a final debt relief for Africa.”