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Debt burden of the least developed nations rises to $744 billion – World Bank

Total external debt of the least developed countries under the DSSI increased to $744 billion in 2019.

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Economy: IMF & World Bank differ on Nigeria’s growth outlook, Amid coronavirus spread, World Bank to step down global growth forecast , Nigeria to receive first tranche of World Bank’s $3 billion loan soon, World Bank commits $12 billion to curb coronavirus, defend developing countries’ economy

The total external debt of the least developed countries under the Debt Service Suspension Initiative (DSSI) has increased by 9.55% to $744 billion in 2019.

This was disclosed in the World Bank’s International Debt Statistics 2021 released in Washington D.C. on Monday.

According to the report, the figure was equivalent on average to one-third of the countries’ combined gross national income.

READ: Nigeria total public debt hits N31 trillion as debt service gulp over N1.2 trillion in H1 2020 

It stated, “Lending from private creditors was the fastest-growing component of the external debt of DSSI-eligible borrowers, up five-fold since 2010. Obligations to private creditors totaled $102 billion at the end of 2019. The debt stock of DSSI-eligible countries to official bilateral creditors composed mostly of Group of 20 (G-20) countries, reached $178 billion in 2019 and accounted for 27% of the long-term debt stock of low-income countries.”

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According to the report, this highlights an urgent need for creditors and borrowers alike to collaborate and stave off the growing risk of sovereign-debt crises triggered by the COVID-19 pandemic.

READ: Nigeria’s total public debt stock increased by N2.381 trillion in 3 months

It added that the pace of debt accumulation for these countries was near twice the rate of other low- and middle-income countries in 2019.

The report said that in response to an urgent need for greater debt transparency, this edition provided more detailed and disaggregated data on external debt than ever before in its nearly 70-year history.

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According to the report, details include breakdowns of what each borrowing country owes to official and private creditors in each creditor country and the expected month-by-month debt-service payments owed to them through 2021.

Pre-COVID

The World Bank said that before the onset of the COVID-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in its Four Waves of Debt report published in December 2019.

READ: Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

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“Responding to a call from the World Bank and the International Monetary Fund, the G20 endorsed the DSSI in April 2020 to help up to 73 of the poorest countries manage the impact of the COVID-19 pandemic. The debt stock of DSSI-eligible countries to official bilateral creditors, composed by mostly G-20 countries, reached 178 billion dollars in 2019 and accounted for 17% of long-term net debt flows to low and middle-income countries. Within the G-20 creditor group, there have been some important shifts characterized by a marked increase in lending by G-20 member countries that are themselves middle-income countries,” it added.

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READ: Nigeria records lowest remittances from abroad since 2008

Citing China as an example, though by far the largest creditor, it had seen its share of the combined debt owed to G-20 countries rise from 45% in 2013 to 63% at the end of 2019.

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It said that over the same period, the share for Japan, the second-largest G-20 creditor, had remained broadly the same at 15%.

READ: LCCI condemns Senate over Buhari’s $22.7 billion loan approval

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Around the World

Donald Trump and Joe Biden clash over plans to lift travel ban on UK, EU, Brazil

Joe Biden’s incoming administration has dismissed plans by President Donald Trump to lift the coronavirus-related travel bans for non-American citizens.

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The incoming administration of President-elect Joe Biden has dismissed plans by the outgoing President, Donald Trump to lift the coronavirus-related travel bans for non-American citizens arriving from the European Union, the U.K. and Brazil, which means the curbs will stay in effect.

This follows the announcement from Trump in the White House on Monday that the bans could be lifted because of the administration’s last week’s decision to require international travellers to present either the results of a negative recent coronavirus test or evidence that they had already recovered from the disease. The change would go into effect starting Jan. 26, six days after Biden takes office.

However, the announcement by Donald Trump was rejected as Joe Biden’s Spokeswoman, Jen Psaki, in a tweet post, disclosed that the incoming administration plans to block the outgoing US President’s move according to a report from Bloomberg.

READ: Twitter drops 8.5% in early trading over President Trump ban

What Joe Biden’s spokeswoman is saying

  • Psaki in her statement, tweeted, “On the advice of our medical team, the Administration does not intend to lift these restrictions on 1/26. In fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of COVID-19.’

She said that with the worsening pandemic and more contagious variant emerging globally, this is not the time to be lifting restrictions on international travel.

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What President Donald Trump has said

Trump, in a White House announcement, had pointed out that the international travel restrictions could be eased safely.

  • Trump in a proclamation said, “This action is the best way to continue protecting Americans from Covid-19 while enabling travel to resume safely. Under his plan, travel bans would remain in place for China and Iran, the White House said, citing their “lack of cooperation” with the U.S. in fighting the virus.’’

The recent decision by the Centers for Disease Control and Prevention to require a negative Covid-19 test for people arriving in the U.S. from other countries was not directly linked to the travel ban but was seen as a way to impose safety restrictions that would allow for a resumption of travel.

Despite the surge in Covid-19 infections, experts conclude that allowing people into this country from other nations wouldn’t pose a significant risk, especially with new testing requirements.

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READ: US Capitol complex temporarily shut down

What you should know

  • It can be recalled that President Donald Trump had initially announced the restrictions on March 11 in the early days of the pandemic on nearly all non-US citizens who had travelled to 28 EU countries, China and Iran, as part of the bid to curb the spread of the virus.
  • Brazil was later included in the travel ban on May 25 and applies to any foreign nationals who had been in any of those nations within the previous 14 days.

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Around the World

US Capitol complex temporarily shut down

The US Capitol complex was shut down temporarily on Monday as a precautionary measure after a small fire broke out nearby.

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The US Capitol complex was shut down temporarily for about an hour on Monday as a precautionary measure after a small fire broke out nearby, highlighting the security concerns that are being raised days before the inauguration of President-elect Joe Biden.

The security concerns and the lockdown follows the January 6 attack on the US Capital by supporters of the outgoing US President, Donald Trump, after his encouragement and inciting comments, calling the Presidential election a fraud without any proof of evidence.

READ: President Trump says he won’t attend Joe Biden’s inauguration

Some of them even called for the death of the US Vice President, Mike Pence for presiding over the certification of Joe Biden’s November election victory.

While making the disclosure in a statement, the Capitol Police said that the lockdown has been lifted and the nearby fire contained.

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The Acting Chief of the Capitol Police had said that the complex which comprises of the Capitol, its grounds and several buildings were shut down as a precautionary measure.

READ: US Supreme court dismisses Texas bid to overturn presidential election results

The US Secret Service in a tweet post on its official Twitter handle said, “Out of an abundance of caution the U.S. Capitol complex was temporarily shutdown. There is no threat to the public.’’

The city’s fire department in its tweet post said that firefighters put out a fire outside near the Capitol complex.

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The fire department said, “There were no injuries. This accounts for smoke that many have seen.”

READ: Huawei accuses the United States of hacking

What you should know

  • President-elect, Joe Biden is expected to be sworn in at the US Capitol on Wednesday amid an unprecedented cordon of security, with strict physical distancing measures in place due to threats of violent attacks in Washington and the rising cases of coronavirus infections.
  • Donald Trump, who is just fresh from a historic second impeachment from the congress had said he would not attend, although his deputy, Vice President Mike Pence, had given an indication that he would attend.

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Appointments

Joe Biden appoints Nigerian-born Funmi Olorunnipa Badejo as Counsel

Nigerian-American, Funmi Olorunnipa Badejo has been appointed as a member of the office of the White House Counsel.

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U.S President-elect, Joe Biden, announced the appointment of Nigerian-American Funmi Olorunnipa Badejo as a member of the office of the White House Counsel, to serve as an Associate Counsel.

He announced it this week in a statement seen on his transition website.

A part of the statement reads:

  • “The Counsels are experienced and accomplished individuals, have a wide range of knowledge from various fields and will be ready to get to work on day one.”

What you should know about Funmi Badejo

  • Funmi Olorunnipa Badejo, before the announcement, was General Counsel of the House Select Subcommittee on the Coronavirus Crisis, chaired by House Majority Whip, James E. Clyburn.
  • Other government roles she has served include serving as Counsel for Policy to the Assistant Attorney General in the Civil Division of the U.S. Department of Justice, Ethics Counsel at the White House Counsel’s Office, and Attorney Advisor at the Administrative Conference of the United States during the Obama-Biden administration.
  • She started her career as an associate with the law firm of Manatt, Phelps & Phillips, LLP and was also a Legal Counsel at Palantir Technologies Inc.
  • She is a graduate of Political Science from the University of Florida, with a Master of Public Administration (MPA) from Harvard University and holds a Law Doctorate from the University of California School of Law.
  • She becomes the 3rd Nigerian American to be appointed under the Biden Government.

Biden’s transition committee said the new Counsels would work under the direction of White House Counsel, Dana Remus, and “help restore faith in the rule of law and the accountability of government institutions.”

In case you missed it

  • Nairametrics reported last month that United States President-elect, Joe Biden, selected a Nigerian-born attorney, Adewale Adeyemo, as the Deputy Treasury Secretary.
  • Osaremen Okolo, 26, was also appointed as COVID Policy Advisor and a member of the COVID-19 Response Team.

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