FG rejects debt relief offer

The Federal Government has rejected debt relief entreaties by the World Bank.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, explained that accepting the offer might trigger the incident of default by some of the lenders.

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She spoke in Abuja on Tuesday during the virtual public presentation of 2021 budget proposal.

Nigeria’s total debt stock (foreign and domestic) as of June 2020 stood at N31.01trn (external, N11.36trn and domestic, N19.65trn).

The minister said: “No, we’re not taking World Bank debt relief offer.

“The reason being that we’ve assessed the offer, and we’ve reviewed the loan agreements we’ve committed to between us and other countries.

“We’ve also had to review our agreements with the commercial lenders such as private parties that buy our Eurobonds. Right.

“Now, we’re being limited in being able to access the debt relief.

“We understand there w’ll be a DSSI 2.0 currently being considered by the G-20.

“It’s not only Nigeria. There are a number of other countries globally that are not able to access the DSSI1 because of similar limitations as Nigeria.

“The risks are high and taking the offer might trigger the incident of default by some of our lenders.

“We’ll try to play safe and not take it.

“The good news for Nigeria is that the component of debt service obligation we have under the bilateral agreement is actually very small and it’s something we can contain and manage.

“But if the next version comes up, and these limitations are taken into account, just like some of our peers who also could not take the debt relief because of the same limitations, then we’ll consider it at that time and see the terms and conditions and what the risks are to our country”.

On whether Nigeria will approach the international capital market to raise additional capital, she said the option was open and could be leveraged if yields are good.