Nigeria to benefit as G-20 mulls extension of debt service freeze till December

David Malpass, World Bank president, says G-20 countries may extend debt service suspension till December.

He said a decision will be taken at the group of 20 gathering this week.

The G-20, is a group of finance ministers and central bank governors from 19 of the world’s largest economies, including those of many developing nations, along with the European Union.

G-20 countries had established a debt service suspension initiative (DSSI) which took effect in May 2020.

According to the World Bank and International Monetary Fund (IMF), the DSSI is meant to help countries concentrate their resources on fighting the coronavirus pandemic and safeguarding lives.

Nigeria had benefited from the initiative which delivered about $5 billion in relief to more than 40 eligible countries.

In all, 73 countries are eligible for a temporary suspension of debt-service payments owed to their official bilateral creditors.

The suspension period which was originally set to end on December 31, 2020 was extended to June 2021.

Speaking with reporters Monday, Malpass said the extension to end of 2021 will probably be the final.

He said the extension will help in saving more money that countries could use to combat COVID-19 and support their economies.

The World Bank chief added that actual debt relief would also be needed to allow poorest countries bring their debt burdens to a more moderate level.

“I expect resources will be a challenge. I think there will be years of greater need for deeply concessional resources,” he said.

Recently, Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), said multilateral debt relief for low-income countries will boost investment and trade globally.