Worried by the devastating effects of coronavirus Pandemic and plunge in oil prices at the international market, President Muhammadu Buhari has urged international financial institutions to cancel the debt obligations of member states to help them withstand the scourge, according to Bloomberg.
Buhari, in a meeting with other heads of state from the Non-Aligned Movement, urged official lenders to help cushion the pandemic fallout with “outright debt cancellation,” according to a statement sent by his office.
Similarly, Reuters reports that Zainab Ahmed, finance minister says government is amending its 2020 budget to assume an oil price of $20 per barrel.
“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,” says Ahmed in a web conference about the impact of low oil prices on the country.
Ahmed also said Nigerian oil and gas projects will be “delivered much later than originally planned” due to upstream budget cuts.
Nigeria’s economy has been battered by low oil prices following a dispute between Russia and Saudi Arabia, as well as the impact of Covid-19 Pandemic.
Indeed, Nigeria has been entangled in the web of mounting debts, even as penchant for more grows on daily basis.
In fact nearly half of Nigeria’s outstanding external debt is with multilateral lenders, led by the World Bank Group with $10.1 billion.
Beijing-based Export-Import Bank of China is the second-biggest creditor with loans totaling $3.2 billion, while Eurobonds account for $10.86 billion or 39% of external debt.
Most analysts are becoming uncomfortable with the country’s rising requests for loans from China, citing the neocolonal zeal by China in alleged taking over of critical companies in some African countries for failure to honour their financial obligations.
In April, Finance Minister Zainab Ahmed said the government is seeking a temporary suspension from multilateral and bilateral creditors to unlock funds to battle the illness that is spreading fast in Africa’s most populous country.
The West African country recently received $3.4 billion in emergency financing from the International Monetary Fund,(IMF).