Connect with us

Business

World Bank, IMF Calls on G20 to Suspend Debt Payments for Poor Countries

Enterprise Team

Published

on

The World Bank and International Monetary Fund (IMF) have called on the Group of Twenty (G20) to offer debt relief for the poorest countries in a bid to help them tackle challenges posed by Covid-19.

In a joint statement on Wednesday, March 25, 2020, the two organizations noted that “the coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.”

It is in this regard that “the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

The two organizations want G20 to task them in making “these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries.”

Once adopted, the debt relief “will help IDA countries with immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country.”

G20 was formed in 1999 and comprises of 19 countries as a central forum for international co-operation on financial and economic issues.

As of 2020

IDA constitutes of 76 countries that are eligible to receive IDA resources. Majority of these countries are in Sub-Saharan Africa,

Eligibility for IDA support depends first and foremost on a country’s relative poverty, defined as GNI per capita below an established threshold and updated annually ($1,175 in the fiscal year 2020).

IDA also supports some countries, including several small island economies, that are above the operational cutoff but lack the creditworthiness needed to borrow from the International Bank for Reconstruction and Development (IBRD). Some countries, such as Nigeria and Pakistan, are IDA-eligible based on per capita income levels and are also creditworthy for some IBRD borrowing. They are referred to as “blend” countries.

Kenyan Enterprise is Kenya's most incisive and informative platform to learn about business news, technology, markets, companies, startups, leadership advise, curated business and industry opinion, and affluent lifestyles.

Enterprise Magazine is Owned by The Carlstic Group Ltd. Copyright © 2016—2024. Site Developed and Maintained by Carlstic