By Elizabeth Chukwuma
The International Monetary Fund, IMF, has said that 20 African countries are currently in debt distress or at risk of debt distress, which should be a source of concern to African Heads of State and Government. The African countries debt profile, according the IMF had generally risen over the last ten years. Take for instance, Nigeria external debt, which was 10.7 billion of the United States dollar in 2015, had risen to over $38 billion and much of it is owed to the Asian country of China.
The debt situation has become more worrisome as President Muhammadu Buhari’s administration is borrowing more as the debt servicing level is also rising to the disadvantage of Nigerians who are feeling the economic pain as the government could not settle much of its social responsibilities to the people but to overburden the people with increase in electricity bills and frequent upward review of retail price of Petroleum Products, particular, Premium Motor Spirit, PMS, popular, petrol.
Undergraduates of Federal Universities have been at home since February14, 2022, because the University Lecturers, hiding under the cover of Academic Staff Union of Universities, ASUU, had embarked on one month warning strike, which had been extended by another three months because of the inability of the government to fulfill its own part of the agreement reached with the ASUU Leadership in 2009, during the Administration of former President Goodluck Jonathan, now being wooed to join the ruling All Progressive Congress, APC, Presidential race by allegedly using shadowy groups to purchase the party N100 million Expression of Interest and Nomination Forms , pegged at N50 million for him and other Presidential aspirants.
ASUU Leadership, according sources is seeking improved welfare revitalization of Universities which amounts to N.1 trillion and academic autonomy, which the government is not ready to guarantee because of its huge debt servicing ratio which is eating deep into the economy.
Perhaps to free funds to invest in Education and health sectors in the African Continent, the Conference of Speakers and Heads of African Parliamentarians , CoSAP, on Tuesday, May 10, 2022, agreed ‘’to pursue debt forgiveness for the continent creditor nations including Nigeria. That much was confirmed by Femi Gbajabiamila, Speaker, House of Representatives.
He may have gladdened the heart of African countries Heads of State and Government borrowing the money tied to specific projects that they are going to push for a tripartite agreement between the creditor, executives, and other governments and Legislature.
He had said that that they have to push for the tripartite agreement because even ‘’if a country’s debt is forgiven and funds are freed up to be diverted to other sectors of the economy, the creditors will need to be assured that the institution that is responsible for appropriation is involved’’.
The CoSAP, who are worried that the Executive arm of government misapply the external loans borrowed in their respective countries were said to have signed commitments within themselves and ready to commit to the creditors to effectively monitor the spending of all borrowed funds.
As a prelude to ensure that the Executive does the right thing the African countries had agreed on the need ‘’to step up their oversight duties in tracking how the Executive spent loans taken on behalf countries, which had ended as debt burdens and traps’. Some of the Parliamentarians were aid to have argued that in countries that had secured ‘’debt reliefs, the Parliaments must ‘’interrogate how the money returned to them was spent’’.
There are fears in both official and unofficial circles that in asking for debt relief or debt cancellation by the CoSAP, from creditors – nations and multilateral financial institutions, they may at several factors including accounting for how the loans were utilized and the compliance of the countries to agreements signed at inception of the loan requests.
Until the CoSAP, took the initiative to push for debt relief for African countries from creditor -nations, the IMF, on its part has allocated $33 billion in Special Drawing Rights, SDR, providing an immediate liquidity boost 20without adding to the debt portfolio.
The G20 creditor-nations short -term crisis management tool- the debt service suspension initiative, DSSI, has just ended and its replacement –the Coomon Framework for debt Treatment Beyond the DSSI, was said to have been implemented far more slowly than originally envisaged with Chad, Ethiopian and Zambia, Kenneth Kaunda, home country.
