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Nigeria didn’t ask WB for debt restructuring

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By Abiodun Okunloye

Nigeria has not approached World Bank for debt restructuring, says WB President.

David Malpass, The World Bank Group president, said that Nigeria hadn’t requested debt restructuring from them. He said this in response to Minister of Finance Budget and National Planning, Mrs. Zainab Ahmed words saying that the country was not trying to restructure its debt but was instead looking at different options, such as how to buy back some of its bonds. On the same, the CBN Governor, Mr. Godwin Emefiele, said he was hopeful that Nigeria’s Consumer Price Index (CPI), which is used to measure Inflation, would slow down from its current rate of 20.52 percent. Malpass said that as part of the G20 Common Framework process, the bank collaborates with the International Monetary Fund (IMF) on concerns related to debt relief. He affirmed this during the IMF/World Bank annual meetings on going in Washington, D.C, which was contrary to Mrs. Zainab Ahmed’s statement.

Nigeria and Ghana requested no common framework treatment. This would help countries choose a debt-restructuring route and cease debt payments while negotiating. The Common Framework addresses insolvency, protracted liquidity problems, and IMF-supported reforms. Traditional “Paris Club” creditors, such as France and the U.S., and new creditors, such as China and India, which overtook the Paris Club as lending institutions over the last decade, agreed to integrate debt relief consistent with the debtor’s ability to pay. Resolving collective action difficulties and ensuring fair responsibility sharing requires private creditors to take part on comparable terms, but only Chad, Ethiopia, and Zambia have requested debt relief. Nigeria’s debt as of March this year is N41.60 trillion. Malpass recommended Nigeria cut gas Subsidies by lowering them gradually. He added that subsidies lower Nigeria’s oil income. This year’s oil price rise hurt Nigeria’s finances due to a large subsidy.

Exchange rates hinder capital flows and foreign direct investment.

Furthermore, he explained that Multiple exchange rates hinder capital flows and foreign direct investments. He urged Nigeria to lower Trade protectionism. Trade policy protects imports and limits exports. So, they will work with the IMF to assess Nigeria’s debt Sustainability, but the country would interact with bondholders and official creditors. In a ‘Debate on the Global Economy,’ which involved the IMF Managing Director, Kristalina Georgieva, Mrs. Ahmed explained that the country is already feeling pressure; the market prices are too high for the country to come out, and inflation and foreign debt are rising.

Renegotiating and extending repayment terms will boost debt service Revenue. Mrs. Ahmed said that the country is not restructuring its loans but trying to stretch them out by buying back bonds. IMF Managing Director advised in a session that the country shouldn’t wait for debt financing storms but extend maturities to match currency obligations with earnings and do what Nigeria is doing in this environment. During a separate IMF Global Policy Agenda media briefing, Georgieva noted the need to support low-income countries with huge debt burdens to avert a food crisis. She said they must support developing markets because a stronger dollar, high borrowing costs, and capital outflows affected them the most. Most especially for debt-ridden nations, this is crucial for low-income countries, where 60% are in debt distress. Hunger needs more attention as over 345 million hungry people, women, children, and men starve.

Emefiele believes monetary policy tightness will reduce inflation.

He predicted to see slowing inflation. However, Daniel Leigh, The Divisional Chief Research Department, IMF, also said Nigeria’s inflation would be 19% this year and down to 17 per cent next year. But part of this doesn’t reflect the CBN Monetary Policy and falling oil and global Food Prices. Nigerian inflation is 20.5%, and CBN recently raised Monetary Policy Rate by 150 basis points, from 14-15.5%. CBN governor responded to IMF CPI predictions. They risk inflation., Nigeria’s August inflation was 20.5%, so the monetary policy was tight, which resulted in 17%, and the tightening is reducing demand. While Emefiele was reacting to the World Bank President’s advice, he said they told them to adopt homegrown policies at every meeting.

The government says diversifying the economy will fix the Oil and Gas Industry. Mr. Boss Mustapha, the Secretary to the Government of the Federation (SGF), affirmed during the 50th anniversary of the Petroleum Training Institute (PTI) event in Abuja that unfinished business is part of what is affecting the oil industry. The situation got worse in September when the country is into Oil shortages. he believes that with the institute’s work and NNPC’s collaboration with other sector players, they can navigate this energy environment, providing for the people and protecting the environment, prioritizing clean fuels, decarbonization, and gas.

Petroleum Institution is helping the oil and gas sector.

Moreover, Mustapha said that the petroleum school has also helped the sector. Many of its 50,000 students are now employees. Gabriel Aduda, the Permanent Secretary in the ministry representing Minister of State, Petroleum Resources, Timipre Sylva, affirmed this, urging it to remain active in its research and development efforts. Mele Kyari, CEO of NNPC Group, urged PTI to adapt to the ongoing change. The next decade’s Technology is unknown. He said, “Business changes fast.”. In the same, Principal Dr Henry Adimula also said he wants PTI school to be the best in Africa. The institute provides training, research, and consulting. Early innovations at the institute helped grow the oil and gas sector, and he thanked PTDF for repositioning the school. Since 1972, the institute has graduated more than 50,000 technologists and technicians. According to him, PTI is training divers for deep offshore operations.


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