Reacting to a recent request by President Muhammadu Buhari for European countries to grant debt relief to African countries, a Twitter user, Manney Uto claimed that the debt relief had already been given to African countries and extended until ‘in 2022. This implied that President Buhari had made an unnecessary request to the international community.
Verdict: misleading. The claim that debt relief has been given to African countries except Nigeria is misleading. Suspension of debt service and not outright debt cancellation has been granted. Nigeria has rejected offers to suspend debt service.
Even so, private creditors who hold commercial debts and some countries have not participated in Africa’s debt relief. Although some multilateral and bilateral creditors, including the G20, have granted debt service suspension to some African countries, President Buhari has advocated outright cancellation of Africa’s debt.
Twitter user Uto via his handle @BrosManney criticized President Buhari’s call for debt relief, saying African countries have already benefited from debt forgiveness.
He said Africa’s debt relief has also been extended.
“Who is writing Buhari’s speeches? Debt relief has been granted to African countries, extended until 2022,” he said.
Calling the international community’s demand for forgiveness for Africa’s debt “shameful,” Uto said Nigeria was excluded from debt relief.
Nigeria “has been excluded due to massive direct payments to government officials by ministers and general managers of ministries, departments and agencies without consequence management,” he said.
Buhari’s request to European countries
President Muhammadu Buhari attended the recent Africa Financing Summit held in Paris, France, where he urged European countries and multilateral lenders to consider restructuring countries’ debt portfolios Africans as complete relief to help them fight the effects of the COVID-19 pandemic. .
Speaking in Paris on âExternal financing and debt treatment,â Buhari said falling commodity prices, with COVID-19 weighing on the global economy, has further slowed growth in some countries and put a strain on health facilities.
He was quoted in a statement by his senior special assistant in charge of media and publicity, Garba Shehu, saying: “It is in this vein that we seek the support of the French government with its influence in the European Union to lend its voice to the efforts being made to mobilize additional resources for developing economies, especially Africa, in order to boost the amount of investment in our economies. “
In the meantime, is it true that debt relief had already been given to Africa, implying that President Buhari’s request was unnecessary?
University of Cape Town finance professor Misheck Mutize explained that a debt service relief program 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 Paris Club creditors.
Mutize explained that the goal was to free up more than $ 20 billion that governments could use to strengthen their health services.
For example, the Executive Board of the International Monetary Fund (IMF) approved, on April 1, 2021, the third tranche of grants for debt service relief for 28 member countries under the Catastrophe Containment and Relief Trust. (CCRT).
This approval followed two previous tranches approved on April 13, 2020 and October 2, 2020 respectively.
A press release issued by the IMF on April 5, 2021, clarified that debt service relief would allow “the disbursement of CCRT grants for the payment of all eligible debt service due to the IMF from its poorest members. and the most vulnerable from April 14. From 2021 to October 15, 2021, estimated at 168 million SDR (238 USD).
The Fund revealed that subject to the availability of sufficient resources in the CCRT, debt service relief could be granted for the remaining period from October 16, 2021 to April 13, 2022, for a total of approximately SDR 680 million. ($ 964). .
However, beyond the relief of the debt service of certain African countries, in the Economic Outlook for Africa 2021 called “From debt resolution to growth: the road ahead for Africa”, African Development Bank Group President Dr Akinwumi Adesina called for âone last comprehensive debt relief for Africa. “
âThe time has come for Africa’s final debt relief. But such relief would require African countries to credibly commit to upholding their part of the deal through bold governance reforms to eliminate all forms of public resource leakage, improve resource mobilization. national policies and enhance transparency. , including on debt and in the natural resources sector, âAdesina said in the report released in March 2021.
He explained that the G20 is making global partnership efforts to support temporary debt relief for developing countries through the Debt Service Suspension Initiative.
“However, debt payments are only deferred and the initiative only covers a small part of Africa’s total bilateral debt,” he said.
Similar to Adeshina’s call for Africa’s final comprehensive debt relief, Mutize explained that some experts “have called for outright debt cancellation to ease the debt burden of African countries emerging from the COVID-19 pandemic crisis will have high public debt as they use all available lines of credit to secure resources to fight the pandemic. “
Mutize noted that private creditors who hold commercial debts have been unwilling to participate in debt relief as they “have criticized the G20’s call for the freezing of all debt repayments.”
However, the President’s official spokesperson Garba Shehu posted on his Twitter account @GarShehu that President Buhari told the Summit that Africa needs “full relief”, not just relief from the crisis. debt service for some African countries.
“According to him, many African countries were already in debt distress and the suspension of debt service by France and the G-20 does not go far enough,” Shehu tweeted.
On the claim that Nigeria has been excluded from debt relief granted to Africa, Daily Trust recalls Sunday that in October 2020, the federal government refused openings to suspend IMF debt service .
Minister of Finance, Budget and National Planning Ms Zainab S. Usman announced the Federal Government’s decision to reject debt relief during the public presentation of the breakdown and highlights of the draft budget 2021 in Abuja.
Similarly, in April, the World Bank Development Committee and G20 finance ministers approved the Debt Service Suspension Initiative (DSSI) in response to a call by the World Bank and the IMF to grant suspension of debt service to the poorest countries to help them manage the severe impact of the COVID-19 pandemic.
But the federal government has said the risks of debt relief now far outweigh the potential benefits. “No, we are not accepting the World Bank debt relief offer,” the minister said to the question.
The claim that debt relief has been given to African countries except Nigeria is misleading.
Suspension of debt service and not outright debt cancellation has been granted.
Nigeria has rejected offers to suspend debt service. Even so, private creditors who hold commercial debts and some countries have not participated in Africa’s debt relief.
Although some multilateral and bilateral creditors, including the G20, have granted debt service suspension to some African countries, President Buhari has advocated outright cancellation of Africa’s debt.
It also matched Dr Adesina’s recent call for “Africa’s final debt relief”.