Nigeria, alongside other nations within the G-24 group, has intensified its call for debt relief, particularly among African countries, during the ongoing World Bank/IMF summit in Morocco. Finance Minister Wale Edun and his counterparts have urged for increased concessional lending, with a focus on supporting investments in global public goods and sustainable development initiatives like affordable access to water and energy resources.
Speaking at the Africa Group 1 Constituency Meeting, Mr. Wale Edun emphasized the need for an “efficient debt resolution framework” to support post-pandemic recovery. He also welcomed Zambia’s debt restructuring agreement and called for swift resolution mechanisms for Ethiopia and Malawi.
Furthermore, Edun advocated for the “elimination of export restrictions on fertilizer and grains, avoidance of protectionist policies, and the leveraging of normalized supply chains and shipping costs to revitalize global trade.”
The G-24, or the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, serves a crucial role in coordinating the positions of developing countries concerning monetary and developmental matters within the Bretton Woods Institutions (BWI).
The debt situation in African countries is a growing concern. Abebe Selassie, the Director of the African Department, highlighted that approximately 50% of total debts in Sub-Saharan African countries are domestic. During the ongoing IMF/World Bank Annual Meetings, he discussed the challenge of debt forgiveness.
The IMF has provided $80 billion in loans to Sub-Saharan African economies since 2020 for emergency funding and Special Drawing Rights (SDR) allocations.
The G-24 has issued a set of demands during the IMF and World Bank meetings, emphasizing the burden of unsustainable debt and the difficulty in repaying borrowed funds among its members. While acknowledging the G-20 Common Framework, a debt relief initiative by G-20 countries, the G-24 pointed out that some of the world’s poorest and most vulnerable nations are not benefiting from this debt relief program.
The backdrop to this discussion is the increasing struggle with debt that many African countries are facing, with the World Bank’s latest report, “Africa Pulse,” noting that around 21 countries on the continent are at risk of debt default. Several nations, including Ghana, Egypt, Ethiopia, and Kenya, have grappled with debt challenges since the onset of the pandemic.
For context, Nigeria’s Debt Management Office (DMO) reports that the nation’s public debt currently stands at N87 trillion, with foreign debt accounting for N33.24 trillion.
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