The International Monetary Fund (IMF) has approved a six-month extension of debt service relief for 28 member low-income countries. The fund had since March provided debt relief for its poorest and most vulnerable members to assist them in their efforts to tackle the COVID-19 pandemic and its economic repercussions.
This extension is the second tranche of the debt relief it earlier granted 25 countries in April under the Catastrophe Containment and Relief Trust (CCRT).The Managing Director of the IMF, Kristalina Georgieva, made this known in a statement issued on Monday.
“The Executive Board of the International Monetary Fund (IMF) approved on October 2, 2020, a second six-month tranche of debt service relief for 28 member countries under the Catastrophe Containment and Relief Trust (CCRT).“This approval follows the first six-month tranche (April 14 – October 13, 2020) approved on April 13, 2020, and enables the disbursement of grants from the CCRT for payment of eligible debt service falling due to the IMF from October 14, 2020, to April 13, 2021, estimated at SDR 161 (US$227) million.
“Subject to the availability of sufficient resources in the CCRT, debt service relief could be provided for a total period of two years, through April 13, 2022, estimated at nearly SDR 680 (US$959) million.”
The fund said the relief will free up scarce financial resources for vital emergency medical and other relief efforts while these members combat the impact of the COVID-19 pandemic. The countries in this category are Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mozambique, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, the Solomon Islands, Tajikistan, Tanzania, Togo, and Yemen.
It said the debt service relief under the CCRT requires a commitment of about SDR 1billion ($1.4 billion) and so far, donors have provided grant contributions totaling about SDR 360 million, including from the UK, Japan, Germany, the Netherlands, Switzerland, Norway, China, Mexico, Sweden, Bulgaria, Luxembourg, and Malta.