Nigeria is at a crossroads - World Bank Reports

The World Bank has noted that Nigeria is at a crossroads in a special Growth Employment and Markets in States (GEMS) Project report.

The country can choose to tackle the distortions that have reduced incentives for investment and productive activity and move towards sustainable and diversified growth. It can also build on islands of success and promising cluster initiatives and enclaves that can then pull along the rest of the economy (successfully achieved in China and India) or it can ignore the reform imperatives and pay the price of having a highly distorted, rentier economy, once oil prices fall.

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IMF and World Bank Announce US$12.3 billion in Debt Relief for the Democratic Republic of the Congo

2 Jul 2010 12:20 Africa/Lagos

IMF and World Bank Announce US$12.3 billion in Debt Relief for the Democratic Republic of the Congo


KINSHASA, Dem. Rep. of Congo (DRC) July 2, 2010/African Press Organization (APO)/ -- The International Monetary Fund (IMF) and the World Bank's International Development Association (IDA) have decided to support US$12.3 billion in debt relief to the Democratic Republic of the Congo (DRC).


The decisions by the Board of Directors of both institutions1 will generate total debt service savings of US$12.3 billion, which include US$11.1 billion under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, and US$1.2 billion under the Multilateral Debt Relief Initiative (MDRI). Debt relief from the IMF will total US$491 million and from the World Bank's IDA US$1,832 million, with the remainder expected to come from bilateral and commercial creditors. As a result of this relief, the DRC will no longer face a heavy debt service burden in relation to its revenue and foreign exchange resources.


The Boards determined that the country has implemented the policy measures (“triggers”) required to reach the completion point, a stage in which debt relief from both the HIPC Initiative and MDRI becomes irrevocable. The triggers included satisfactory implementation of the country's poverty reduction and growth strategy, maintenance of macroeconomic stability, improvements in public expenditure and debt management, and improved governance and service delivery in key social sectors such as health, education and rural development.


“Reaching the HIPC completion point demonstrates the significant progress that the DRC authorities have made over the past several years in strengthening macroeconomic policy management and performance following a devastating decade-long conflict that destroyed the country's economic and social infrastructure,” said the IMF's Mission Chief for the DRC, Brian Ames. “The conditions for reaching the HIPC completion point provided the authorities with a policy reform framework that guided their efforts to enhance macroeconomic stability, address weaknesses in public financial management and economic governance, and reform the social sectors. Progress in each of these areas also sets a solid foundation for advancing the country's development agenda going forward,” he added.


“We recognize the government's huge efforts toward reaching Completion Point. This could be a turning point in DRC's long troubled history,” said Marie-Françoise Marie-Nelly, World Bank Country Director for DRC. "Going forward, strengthening the rule of law, improving governance – especially in the oil and mining sectors – and improving the business climate are essential next steps to benefit the most vulnerable Congolese citizens,” she added.


The Democratic Republic of the Congo becomes the 30th country to reach the completion point under the HIPC Initiative. The completion point marks the end of the HIPC process for the DRC, which started in July 2003 when the Executive Boards of the IMF and the World Bank agreed that it had met the requirements for reaching the decision point, at which countries start receiving debt relief on an interim basis.


Note to Editors


The HIPC Initiative


In 1996, the World Bank and IMF launched the HIPC Initiative to create a framework in which all creditors, including multilateral creditors, can provide debt relief to the world's poorest and most heavily indebted countries to ensure debt sustainability, and thereby reduce the constraints on economic growth and poverty reduction imposed by the unsustainable debt-service burdens in these countries.


To date, 36 HIPC countries have reached their decision points, of which 30, including the Democratic Republic of the Congo, have reached the completion point.


The MDRI


Created in 2005, the aim of the Multilateral Debt Relief Initiative (MDRI) is to reduce further the debt of eligible low-income countries and provide additional resources to help them reach the Millennium Development Goals (MDGs). Under the MDRI, three multilateral institutions—the World Bank's International Development Association, the International Monetary Fund and the African Development Fund—provide 100 percent debt relief on eligible debts to qualifying countries normally at the time they reach the HIPC Initiative completion point.


For more information on the Democratic Republic of the Congo, please visit: http://www.imf.org/external/country/COD/index.htm or www.worldbank.org/drc


For more information on debt relief, click:


http://www.imf.org/external/np/exr/facts/hipc.htm,


http://www.imf.org/external/np/exr/facts/mdri.htm and


http://go.worldbank.org/83PZB7FH80.


Source: International Monetary Fund (IMF)

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Moving Nigeria Forward To The Next Level

~ By Roy Agiande

It is no longer news that the world has been hit by a severe financial crisis often compared to the Great Depression of the early 1930s and countless jobs have been lost worldwide due to this catastrophic phenomenon. It is scary to note that developed countries are shedding jobs, recording huge losses, cutting down on production cost and salaries. Worthy of note is the report that the UK has been hit by an unemployment figure of over 2.4 million which is the worst recorded over a decade. These are countries that have a well structured policy of job creation and backup policy to absorb the different fluctuations and shortcomings of the economy. I begin to wonder if there is hope for Nigeria, a less developed country where both the Private and Public sectors are all counting monumental losses, some banks are experiencing what you may call SYSTEMATIC FAILURE; where the Apex Bank has sacked the CEOs of major banks for gross insider abuse and the stock market experiencing a meltdown.

There are so many ways of helping the economy bounce back and diverse from its traditional mono-economic ways. One of which is to inject capital to the ailing and hungry sectors. Startup Weekend Nigeria is one of such avenues of doing just that. Fresh and radical business ideas proposed and funded from the scratch and new entrepreneurs are created. If you ask me, it’s like killing two birds with one stone. How?

By creating about 10 companies every Startup Weekend means new jobs would be created as well and the spin-offs could boost the economy, thereby complimenting the government’s efforts of job creation. Secondly, it’s also a way of capital injection to the cash strapped economy. Past minister of finance and present World Bank President, Dr (Mrs.) Ngozi Iweala once said:
“Create entrepreneurs, because it is a definite catalyst for job and wealth creation.”

It might interest you to know that some of the biggest businesses in the United States started as startups which eventually turned to multibillion dollar companies. Believe it or not, Nigeria is blessed with a large array of great thinkers and business minds which are going to be harvested and utilized to full capacity through Startup Weekends in Nigeria. It would also address the issue of the pool of unemployed graduates and those fresh from the National Youth Service Corps (NYSC) Scheme.