THE Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that conflict and natural disasters have put countries’ financial stability at risk.
Cardoso gave the warning in Abuja at the Joint World Bank/IMF/WAIFEM Regional Training on Medium Term Debt Management Strategy in Abuja on Monday.
Represented by the Director of the Monetary Policy Department of the CBN, Dr. Mohammed Tumala, the apex bank boss said that recent events like the COVID-19 pandemic, geopolitical conflicts, and natural disasters have put a strain on many countries’ finances, making them more likely to seek loans from diverse sources.
However, these non-traditional lenders might come with stricter repayment terms and potentially higher risks compared to Paris Club loans.
“Following the COVID-19 pandemic, along with other developments such as geopolitical conflicts and natural disasters, the financial strain on our sub-region has escalated, posing a threat to their macroeconomic and financial stability and prospects for faster recovery,” he said.
He went on to argue that the way countries manage debt owed to the Paris Club may not be as effective for this new set of lenders. Cardoso expressed concern that this new debt landscape could pose a threat to financial stability and economic recovery for many countries.
The CBN governor said, “Public debt dynamics are increasingly influenced by significant debt servicing obligations to non-Paris Club members and private lenders, including commercial banks and bond investors. This shift in the debt structure represents a critical evolution in the global financial framework, with profound ramifications for public debt management in our countries.”
