IMF cancels debt payments for 25 poor countries battling coronavirus for six months

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

The IMF executive board approved the immediate debt service relief for 19 African countries, Afghanistan, Haiti, Nepal, Solomon Islands, Tajikistan, and Yemen, IMF’s Executive Director Kristalina Georgieva said in a statement.

The 19 African countries set to receive debt relief are: Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, The Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, and Togo.

“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 …”” Georgieva said.

This “will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,”

The money will come from the IMF’s revamped Catastrophe Containment and Relief Trust, which will use recent pledges of $185 million from the UK and $100 million from Japan, she added.

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

UN calls for the suspension of debt repayments for the world’s poorest countries

U.N. Secretary-General Antonio Guterres and a group of 165 former global leaders and prominent international figures have earlier called for the suspension of debt repayments for the world’s poorest and most vulnerable countries so they can use their scant resources for the pandemic crisis.

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

“Many of these countries have less than 50 critical care unit beds per country,” LeCompte noted in a statement.

“These countries need to bolster their health systems right away and cancellation of debt for six months will help these countries.”

But he said more needs to be done.

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