As the struggle to come up with measures to manage the adverse social and economic effects of the coronavirus pandemic continues, the Federal Government has announced its intention to seek debt relief from China rather than ask for suspension of interest payments from its Eurobond holders.
This was disclosed in a monitored report from Bloomberg, by the Minister for Finance, Budget and National Planning, Zainab Ahmed, on Tuesday, April 7, 2020.
The minister said that the Nigerian government will be discussing with China and the Multilateral institutions on the possibility of deferring interest payments on those loans as it is looking to mop up funds to make up for revenue shortfalls.
According to the Minister, ‘’We have not considered investors of our commercial paper’’
‘’If it happens anywhere, if it’s something that would work, then we will look at it, but right now we are looking at multilateral lenders.’’
Going further, Ahmed said, ‘’We will talk to the Chinese. We will negotiate multilateral loans and bilateral loans and where we get accommodation, we will take it’’.
However, the Minister did not disclose how much the government hopes to save from these payments this year.
It would be recalled that some days ago, the Bretton wood institutions, International Monetary Fund (IMF) and the World Bank Group, urged all bilateral creditors to suspend debt payment by Nigeria and other 75 International Development Association member countries that have requested for it.
The IMF said that the spread of the coronavirus pandemic in sub-Saharan Africa, would adversely affect the economic growth of the region, with direct disruptions to people’s livelihoods, reduced trade and investment, capital flight especially from foreign investors and tighter financial conditions.
That was in addition to the call by the African Finance Ministers for a moratorium on all debt interest payments by their governments to multilateral institutions, other governments and private loans in response to the coronavirus crisis. They estimate that this will save the continent about $44 billion in 2020.
Just yesterday, while addressing a press conference on Fiscal stimulus measures by government in response to the Covid-19 pandemic and the oil price fall, the Finance Minister announced the intention of the Federal Government to borrow $6.9 billion from multilateral institutions which includes the World Bank, IMF and the African Development Bank to help cushion the impact of the coronavirus pandemic on the Nigerian economy.