President Buhari begs for debt cancellation at United Nations General Assembly

President Muhammadu Buhari has advocated a review of “eligibility criteria” for debt suspension and cancellation for the sake of countries facing challenges, just as he said there was need to review and expand of the Debt Service Suspension Initiative, DSSI.

President Buhari made the plea while delivering his address at the General Debate of the 76th Session of United Nations General Assembly on Friday (today) in New York, USA.

DSSI was established by the G20 countries at the prompting of the World Bank and the International Monetary Fund.

The Initiative is to help countries concentrate their resources on fighting the pandemic and safeguarding the most vulnerable people.

In all, 73 countries are eligible for a temporary suspension of debt-service payments owed to their official bilateral creditors.

It took effect on May 1, 2020, was supposed to end on December 31, 2020, but had been extended through December 2021.

The G20 has also called on private creditors to participate in the initiative on comparable terms.

The World Bank and the IMF are supporting implementation of the DSSI by monitoring spending, enhancing public debt transparency, and ensuring prudent borrowing.

It is this scheme that Buhari referred to in his speech at the UN Assembly on Friday.

According to President Buhari, “We support establishing modalities for a global coordination mechanism at the United Nations Economic and Social Council to systematically monitor illicit financial flows and strengthen financial integrity for sustainable development, with the participation of all relevant stakeholders.

“On the issue of debt, we have seen that developing countries have been faced with unsustainable debt burdens even before the pandemic.

“The COVID-19 pandemic has increased the risk of new wave of deepening debt, where vital public financial resources are allocated to external debt servicing and repayments at the expense of domestic health and financing for critical developmental needs.

“Therefore, there is an urgent need to consider expansion and extension of the Debt Service Suspension Initiative, DSSI, to include all Developing, Least Developed Countries and Small Island Developing States facing fiscal and liquidity challenges.

“In addition, a review of the eligibility criteria for debt suspension, including outright cancellation, is needed for countries facing the most severe challenges.”