IMF predicts more people slipping to poverty in Nigeria, others
The International Monetary Fund (IMF) on Friday said that millions of people would be pushed back into poverty as a result of the economic impact of the Coronavirus pandemic in Low-income developing countries (LIDCs).
Managing Director of the IMF, Kristalina Georgieva in her speech at the Development Committee plenary at the ongoing annual meeting said many of the countries, including Nigeria will accumulate more debt in an attempt to improve fiscal expenditures.
Georgieva said weak healthcare capacity in low-income countries often leaves their populations highly exposed to the pandemic, noting that many governments in LIDCs can mobilize only limited fiscal resources to support their economies.
“This constellation creates a severe threat to the development gains achieved over the past two decades. Millions could be pushed back into poverty, children could lose access to education—with girls likely to be most severely affected—and LIDCs would accumulate high levels of public debt,” she said.
She, however, counsel them to gradually redirect public support to underpin structural change and the post-pandemic economy that should be more equitable and focused on knowledge, digital and green sectors.
“Job-rich investments can support this, like infrastructure rehabilitation in advanced economies, or new infrastructure in emerging markets and developing countries.
She urged them to deal with pre-existing conditions. Those countries that enter the crisis with strong fundamentals – like fiscal buffers, effective institutions, transparent governance and high quality of spending – are doing better. Those with pre-existing difficulties have been more severely affected.
“My predecessor Christine Lagarde used to say, “fix the roof while the sun is shining”. Today, for some countries the roof is leaking, and the rain is pouring in. There is an urgent need to make the repairs and we embrace the need to work together to help.
“We fully support efforts to enhance the international architecture for resolving sovereign debt problems, and we welcome the G20 debt service suspension initiative and the Common Framework for Sovereign Debt Resolution. And we will continue to work with the World Bank on a case-by-case basis to support debt restructuring where this is necessary.
“We will give attention to issues of governance, domestic revenues, quality of spending, transparency and accountability.