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Market Digest Nigeria

Finance

Why Nigeria Won’t Take World Bank COVID-19 Debt Relief —FG


The Federal Government has said Nigeria will not take advantage of the current World Bank COVID-19 debt relief known as Debt Service  Suspension  Initiative (DSSI) because the risks are high

At the 2021 budget explanatory presentation in Abuja on Tuesday, Minister of Finance, Budget and National Planning,  Mrs Zainab Ahmed also told academic and non-academic staff of federal universities that the famed university autonomy is defined by the fact that Federal Government still pays their salaries.

For now, Nigeria is not considering taking advantage of the World Bank COVID-19 debt relief initiative “because we have assessed the offer and we have also reviewed the loan agreements that we are committed to between us and bilateral partners.

“We’ve also had to review the loan agreements with commercial lenders such as the private parties that buy our  Eurobonds. Right now, we are limited in being able to access the opportunity. “We understand that there would be a  DSSI 2.0 that is currently being considered by G20 and there are a number of other countries that are also not able to access the DSSI 1 because of similar limitations that we find in Nigeria.

“The risks are high as taking the offer might trigger incidence of default by some of the lenders so we have to play safe  and not take it.” According to her, Nigeria’s component of debt service obligations under the bilateral agreement was actually very small “and we can manage with it.”


Ahmed wondered why the university system was different from other tertiary institutions and hospitals that have since been migrated unto the IPPIS. “Universities claim that they are independent. Yes, they are, in a manner of speaking but the salaries.

“All we are asking is they biometric capture and we are now assured that what we are paying is true and fair. You can only claim that level of Independence if you generate and pay your salary. “From our view, IPPS has helped us to block leakages and I like to just ask the citizens to try to understand why only a few segments of the working population is fighting this IPPIS. It is designed to enhance transparency in the payment of salaries and to block leakages.

“ASUU is claiming that there are deductions that are being made but deductions are being made from other workers too. “If you are off IPPIS and you are not paying the right taxes, when you get onto the IPPIS platform, things will change because it is designed to enhance transparency in the payment of salaries.

“What is special about those people? If we can capture some tertiary institutions and we can capture hospitals that have also peculiarities of consultants that visit several hospitals.

What is different about the university system that they cannot be also captured?” “In 2015 the wage bill of government in the budget was N1.5 trillion. That has gone up by 150 per cent compared with what we had in 2020.

“The wage bill keeps growing on a daily basis. That is the biggest expenditure item in our budget and we must pay special to it. And I leave it to Nigerians to also be the judge.”

NIGERIAN TRIBUNE

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