NIGERIA and several other African countries look set to receive a $510bn bailout from the World Bank to offset the disastrous economic effects of the coronavirus pandemic that has devastated their economies.
Over the last month, several African governments have introduced lockdowns as part of the global fightback against Covid-19 that has brought about a need to reduce social distancing. This has, however, led to economic collapse as many African economies are dominated by petty artisan and traders who earn their living on a daily basis, so for such people, a lockdown feels like an economic blockade.
Most African countries are also highly dependent on the export of primary products and with global commerce now on hold, their economies face long-term damage as even when buying resumes, prices will slump due to the huge stockpiles that have built up. Faced with an unprecedented economic crisis, Africa will need significant help from the rest of the world to get over the impact of the pandemic.
However, Zainab Ahmed, Nigeria’s finance minister said assistance may be at hand as the World Bank in considering a $510bn package to boost Nigeria and other African countries’ economies over the next three years. Speaking at the ongoing Development Committee Plenary of the 2020 Virtual Spring Meetings of the World Bank Group and the International Monetary Fund, she said it was heartening to note the bank’s willingness to commit up to $160bn within the next 15 months and up to $350bn by 2023.
Mrs Ahmed said Africa supports the call for the mobilisation of $100bn for the continent as an emergency response to the pandemic, with $44bn of the amount earmarked for immediate debt relief. She noted that African countries have been forced to contend with multiple external shocks such as falling commodity prices, decelerating remittance flows, capital outflows, trade disruptions and rapidly rising debt levels.
“It is in this regard that we appreciate the World Bank Group for its timely response with $14bn meant to assist countries to mitigate the initial impact of the pandemic on the human population. We also welcome and commend the bank for its strong and forward-looking commitment to support developing countries’ efforts to restart their economies,” she added.
Although some of the African countries are categorised as middle income, Mrs Ahmed noted that they are equally exposed to very severe vulnerabilities and would certainly benefit from financial assistance to weather the storm and to grow. She added that the African continent therefore, encourages the World bank to embrace inclusiveness in all its support, including debt relief initiatives, irrespective of classification.