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Sunday, Oct 25, 2020

IMF grants debt relief to 25 poorest members to support Covid-19 fight

IMF grants debt relief to 25 poorest members to support Covid-19 fight

The International Monetary Fund has approved grants to 25 member countries, mainly from Africa, to allow them to focus resources on fighting the coronavirus. The fund and World Bank have called on richer countries to consider suspending or cancelling debt obligations from poorer countries during the 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," IMF Managing Director Kristalina Georgieva said in a statement on Monday.

The grants are coming from the revised Catastrophe Containment and Relief Trust (CCRT), and the first to them are 19 African countries (Benin, Burkina Faso, Central African Republic, Chad, Comoros, the Democratic Republic of Congo, Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone and Togo), plus Afghanistan, Haiti, Nepal, Solomon Islands, Tajikistan and Yemen.

Countries are able to request aid even if the coronavirus outbreak has not yet caused significant impact.

Repurposed relief mechanism

The CCRT was first set up to combat the Ebola outbreak in West Africa in 2015. In March, the IMF changed it to help countries with Covid-19, to allow up to two years of debt relief.

Georgieva said the CCRT currently has about $500 million (457 million euros), including pledges from Britain, Japan, China, the Netherlands and others.

She urged other donor countries to contribute to raise the Trust amount to $1.4 billion (1.3 billion euros), to boost the its ability to provide debt relief for a full two years.

Debt relief

The IMF and the World Bank have called for rich nations to stop collecting debt payments from poor countries from 1 May through June 2021.

United Nations Secretary-General Antonio Guterres and a group of 165 former global leaders and prominent international figures has urged the same.

French President Emmanuel Macron, in a televised address on Monday, said France and Europe must offer debt relief to the African continent.

"We must also know how to help our African neighbours to fight more efficiently against the virus, and also help them economically by massively cancelling their debt” he said.

Finance officials from the G7 and G20 countries are due to discuss debt relief this week, and it is expected the G20 countries to back a suspension of debt payments at least until the end of the year.

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