The International Monetary Fund (IMF) has announced debt relief for 19 African nations as part of the organization’s commitment to battling the Covid-19 epidemic.
According to the Executive Board of the IMF in a statement released today, the organization has approved immediate debt service relief to 25 of its member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT). Out of the 25 countries on the list, 19 are African Nations.
The debt relief only covers service fees for incurred debts and covers a period of 6 months. While speaking to TAE, a financial expert from Nigeria explained that this means the listed countries would have service fees payable to the IMF on loans wiped off, and the countries are expected to continue with their payment obligations after the grace period.
Ms. Kristalina Georgieva, the Chairwoman and Managing Director of the IMF, said in a statement issued in Washington, D.C. earlier today that the debt relief was to help the listed manage their resources and target it towards the fight against Covid-19 in their respective countries.
According to her, the relief 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. It will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.
“The CCRT can currently provide about 500 million dollars in grant-based debt service relief, including the recent 185 million dollars pledged by the United Kingdom and 100 million dollars provided by Japan as immediately available resources.
“Others, including China and the Netherlands, are also stepping forward with important contributions”; she added.
Ms. Georgieva also urged other donors to help the IMF replenish the Trust’s resources and further boost its ability to provide additional debt service relief for a full two years to its poorest member countries.
The countries that would benefit from the service debt relief are:
Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Democratic Republic of Congo, The Gambia, and Guinea. Others are Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.
Some critics have questioned the list saying that it lacks transparency and true intent; they argue that although the list represents poor nations, it is wrong for the IMF to exclude African countries with large Covid-19 cases from the list.
For instance, Comoros which stands to benefit from the debt service relief has no case of Covid-19, they claim countries with cases totaling over a thousand should have taken such spots.
Africa currently has 13,641 confirmed cases and has recorded 742 deaths, with Algeria, Cameron, Egypt, Ghana, Ivory Coast, Morocco, South Africa, Niger, and Tunisia recording the most cases.
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