The G-20 group of wealthy countries has concluded plans to grant debt relief to countries considered to be disadvantaged by the World Bank.
All countries classified under the International Development Association (IDA), including Nigeria will benefit.
At the ongoing April 2020 Virtual Spring meetings of the World Bank and International Monetary Fund (IMF), the World Bank President, David Malpass, disclosed that as from May I, there would be debt relief.
According to him: “IDA countries will have bilateral debt relief beginning May 1. That way, they can concentrate their resources on fighting the pandemic and its economic and social consequences.
“I take note that in the G-20 meetings, China is supporting the international agreement to allowing moratorium of debt repayments by IDA countries if they ask for forbearance.
“That’s very important because China is one of the biggest creditors and their participation in that effort is important and was very welcome.”
Malpass noted that a system will be put in place to monitor how countries utilise the funds made available by the debt relief.
“So if the government saves money by not paying creditors, there is an expectation that they use it for health, education, economic rebuilding, jobs and concrete ways to help the people of their country,” he said.
“There is also within the debt relief initiative, the idea that there will be monitoring and assessment of the debt sustainability of poor countries.
“That process itself will amount to transparency. That’s going to change the way that countries have been lending into the developing world and it will improve it substantially and there will be a big benefit even to the creditors.
“It’s not the best system for creditors to be making non-transparent loans into poor countries and this is going to improve the system.”