IMF approves 6 months debt relief for 25 indigent countries

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The International Monetary Fund approved $500 million on Monday to cancel six months of debt payments for 25 of the world’s most impoverished countries so they can help tackle the COVID-19 pandemic.

Nineteen of the countries are African. They are Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, The Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, Sao Tome and Principe, Sierra Leone and Togo.

The remaining ones outside Africa are Afghanistan, Haiti, Nepal, Solomon Islands, Tajikistan, and Yemen.

The managing director of IMF, Ms. Kristalina Georgieva issued a statement saying the executive board approved the immediate debt service relief for the countries under the Fund’s revamped Catastrophe Containment and Relief Trust (CCRT).

She said the deal was part of the Fund’s response to help address the impact of the COVID-19 pandemic.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” she said.

She said the money will come from the IMF’s CCRT which will use recent pledges of $185 million from the United Kingdom and $100 million from Japan.

She urged other donors to help replenish the trust’s resources.

U.N. secretary general Antonio Guterres and a group of 165 former global leaders and prominent international figures have urged the suspension of debt repayments for the world’s poorest and most vulnerable countries so they can use their scant resources for the coronavirus crisis.

Eric LeCompte, executive director of Jubilee USA Network, an alliance of more than 75 U.S. organisations and 700 faith communities working for debt relief, called the IMF announcement “an incredibly positive step.”

“Many of these countries have less than 50 critical care unit beds per country,” LeCompte said in a statement. “These countries need to bolster their health systems right away and cancellation of debt for six months will help these countries.”

However, LeCompte said more needs to be done.

“As the poorest countries in the world, they really need full cancellation” of their debts, he added.

With CTVNews report

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