... IMF supports quest for extension of debt repayment period
Minister of Finance and National Planning, Mrs. Zainab Ahmed has said that the Federal Government is not seeking debt restructuring from global financial institutions but extension of repayment period and possible bond buy back.
Meanwhile the International Monetary Fund, IMF, expressed support for the decision of the FG to seek extension of debt repayment period, saying that is what the country needs to do now.
The Minister of Finance, Ahmed stated this yesterday, Thursday, during the Debate on the Global Economy held on the sidelines of the ongoing Annual Meetings of the World Bank and IMF.
The Minister stated this in clarification of earlier comments in a media interview indicating that the FG is seeking debt restructuring from the financial institutions like the World Bank and the International Monetary Fund, IMF.
She said during the media interview on Wednesday, "We have been engaging financial institutions to look at the opportunity to restructure our debt to further stretch the debt service period to give us more fiscal relief. Those are some of the things we want to achieve in this meeting."
The statement was countered by the World Bank President, David Malpass, who said that the bank and other international financial institutions have not received any request for debt restructuring from Nigeria.
Speaking at his opening press briefing for the annual meetings yesterday, Malpass said: "With regard to debt restructuring, the World Bank works very closely with the IMF on debt situations, Nigeria has not asked for the Common Framework under the G20 process. The process has been slow in acting in Chad, Ethiopia, and Zambia and there are some signs of movement in Zambia but it's still challenging."
As a follow up to her earlier statement and the response from the World Bank President, the Minister, while speaking at the Debate on Global Economy, said: "We are actually filling the pressures, the market costs is too high for us to come out.
"We would explore the markets in the near future and also because inflation is going up and is going to stay up for longer and also our debt service obligations in foreign currency are increasing.
" And what we have decided to do is not to wait for it to happen, we have to start looking at how do we better manage our liabilities.
"For example, our domestic liabilities will be able to shift our loans from short-term to medium and longer-term tenure.
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We have to do the same for international borrowings as well, bilateral loans and even some concessionary loans, that the periods could be stretched to give us more fiscal room while we are working to increase revenue.
"To improve on our revenue-to debt-service ratio, you still need to be able to renegotiate and stretch out repayment implications.
"So, we are not restructuring our loans but we are looking at options of how we can stretch out including buying back some of our bonds when we have the resources to do that."
Also speaking at the Debate, IMF President, Kristalina Georgieva, expressed support for the decision of the FG to seek extension of debt repayment period, saying that is what the country needs to do now.
She said: "When you see that clouds are contextualizing, don't wait, look at ways in which you can extend maturities, you can improve the matching of currency obligations with what you are earning yourself. In that sense, what Nigeria is doing in this current environment is exactly what you should be doing."
