World Bank Rejects Debt Cancellation for Africa

The World Bank Group yesterday rejected request by African heads of state for cancellation of their countries’ debts, saying the world has moved past that line of action.

World Bank Group President, David Malpass said, who disclosed this yesterday during a media roundtable for western and central Africa, said one of the themes of the Paris Conference two days ago, on Tuesday, was the call by African heads of state for cancellation of debts, but that’s not the direction that the world is moving at this point.

Nigeria has the largest World Bank portfolio of more than $12 billion. Those are programmes under implementation covering a variety of sectors, access to electricity, water, education, health, agriculture.

The World Bank says it has this year, delivered about $2 billion for Nigeria in order to help the population have access to critical services but also to support governments and institutions to provide some technical assistance to a variety of stakeholders.

Malpass said over the last 10 years, the World Bank Group has invested over $200 billion in Sub-Saharan Africa and would be investing another $150 billion in Africa in the next five years to support the continent’s recovery.

He said that comprehensive debt solutions, involve debt suspension, debt reduction, the resolution of debt and debt transparency.

He said a permanent solution is necessary for the overhang of debt stocks for countries that have unsustainable debt levels.

He said the World Bank is working closely with the International Money Fund (IMF) to try to implement the G-20 common framework for debt reduction.

“The success of that hinges on full participation by the private sector, and also improvements in debt transparency. The full private sector participation is an essential part of any path to lasting debt sustainability,” he said.

Malpass said the private creditors need to recognise that a successful debt restructuring is a beneficial outcome for all parties involved.

He said the World Bank and the countries of Africa are working to try to have a stable and thriving economic growth prospect for the people of Africa and the business opportunities that are available there.

Malpass said Nigeria has huge potential, and with some of the improvements in the economic policies, the growth can be rapid for people across Nigeria.

“We’ve encouraged efforts that would reduce the subsidies for fossil fuels, that would encourage trade across borders, where Nigeria could be doing more in that area.”

And very importantly, the multiple exchange rates has been a burden on the people of Nigeria, and we’ve encouraged the elimination of the official rates and the unification of rates so that money and investment and remittances can flow in and out of Nigeria with less friction,” he said.

“So, our programme remains strongly supportive of the people of Nigeria and of Nigeria,” he added.