Nigeria which has received $11.5 billion credit from the World Bank so far this year is among several countries asked to withhold debt payments to reduce the burden of ongoing global economic lockdown on the government. The announced was made mid-week. Burkina Faso, Benin, Ivory Coast, Ghana, Benin Republic and others have received similar relief.
Since January 2020 the World Bank, through the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), has disbursed significant amount of loans to African countries to help offset infrastructure decay especially. Repaying or financing those credits is going to drag the debtors economy as well as dent the lifestyle of the citizens as the COVID-19 takes its toll on the continent.
No doubt, the announcement will delight the government in Nigeria. Lower price of oil and necessary economic lockdown have already put the Buhari-led administration in a tight position to fully implement the fiscal plan for year 2020.
While debt refinancing forms almost 40% or a quarter of the budget, delay in repayment means the government will redeploy freed fund to stimulate other sectors, such as the SME ecosystem, to strengthen business development on a large scale locally.