IMF Extends Its Debt Relief to Low Income Countries

Kevin Namunwa | Oct 6, 2020

The International Monetary Fund (IMF) has extended the debt service relief for 28 low-income countries for a second six-month tranche under the Catastrophe Containment and Relief Trust (CCRT). The debt service relief will run until April 2021.

The approval thus enables the disbursement of grants from the CCRT for payment of eligible debt service falling due to the IMF from 14th October 2020 to 13th April 2021, estimated at $227 million.

The move seeks to enable the countries to combat the impact of the COVID-19 pandemic.

On 13th April 2020, the Executive Board of the IMF approved the first six-month tranche, which ran from 14th April 2020 to 13th October 2020.

The countries receiving the grants are among the IMF’s “poorest and most vulnerable members.” They are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Democratic Republic of Congo, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

In the context of the approval of the first tranche, Managing Director Kristalina Georgieva launched a fundraising effort to enable the CCRT to provide debt service relief for up to a maximum of two years, while leaving the CCRT adequately funded for future needs. This will require a commitment of about $1.4 billion. Thus far, donors have provided grant contributions totalling about $510 million, including from the UK, Japan, Germany, the Netherlands, Switzerland, Norway, China, Mexico, Sweden, Bulgaria, Luxembourg, and Malta.

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