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IMF releases list of 25 member countries to receive immediate debt relief

The International Monetary Fund (IMF) has  released a 25 countries list that will receive debt service relief.

They are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.

Ms Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF)  in a statement, disclosed that the Executive Board of IMF has approved immediate 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.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the United Kingdom and US$100 million provided by Japan as immediately available resources”, she said.

Under the IMF, Nigeria has a Special Drawing Right (SDR) of 1498.78 million.

In economics, a Special Drawing Right (SDR) is essentially an artificial currency instrument used by the IMF and is built from a basket of important national currencies.

SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries’ governments.

Others, including China and the Netherlands, are also stepping forward with important contributions.

The IMF boss urged other donors to help replenish the trust’s resources and boost further ability to provide additional debt service relief for a full two years to the poorest member countries.

Nigeria’s relationship with the IMF

According to the Central Bank of Nigeria (CBN), Nigeria joined the IMF after her independence in order to participate and benefit from the purposes of the Fund.

In their inter-relationships, the IMF focuses mainly on Nigeria’s macroeconomic policies.

These are policies that have to do with public sector budgets, the management of interest rates, money, and credit and exchange rate; and financial sector policies, particularly, the regulation of banks and other financial institutions (as agreed by the BIS-Bessel Agreements).

The Fund also pays attention to structural policies that affect the macroeconomic performance of Nigeria.

Recall that Nigeria’s former finance minister, Ngozi Okonjo Iweala, was on Friday named a member of the External Advisory Group constituted by the Managing Director of the IMF, Kristalina Georgieva.

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