IMF Extends $115mln Debt relief for 25 Low-income Countries

ADDIS ABABA – The executive board of the International Monetary Fund has approved the extension of $115 million in debt relief to 25 eligible low-income countries including Ethiopia.

In a statement issued earlier this week, the fund disclosed that it extended the debt relief from January 11 to April 13, 2022, to help the countries ride out ‘pandemic-induced headwinds’.

IMF said the approval of the fifth and final tranche of debt service relief would bring the two-year COVID-19 related Catastrophe Containment and Relief Trust (CCRT) to $964 million.

The latest approval of the fifth tranche, approximately $115 million, follows four prior tranches approved on April 13, 2020, October 2, 2020, April 1, 2021, and October 6, 2021.

It “helps free up scarce financial resources for vital health, social and economic support to mitigate the impact of the Covid-19 pandemic,” the fund said.

The tranche completes the two-year COVID-related debt service relief first approved on April 13, 2020, totaling a cumulative debt service relief of about $ 964 million.

African countries have dominated the list of eligible countries to benefit from the debt service relief in the fifth tranche under the Catastrophe Containment and Relief Trust.

They are Benin, Burkina Faso, Burundi, Central African Republic, Comoros, Djibouti, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kyrgyz Republic, Lesotho, Liberia, Madagascar, Malawi, Mali, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, Solomon Islands, and Tajikistan.

The fund in its 2020 global debt database disclosed that global debt soared to $226 trillion, rising by 28 percentage points to 256 per cent of gross domestic product.

In the wake of the pandemic, the IMF had commenced an urgent fundraising effort to raise $1.4 billion in grants to help the CCRT provide debt relief for up to a maximum of two years.

The IMF said the European Union, the UK, Japan, Germany, France, the Netherlands, Spain, Switzerland, Norway, Singapore, Greece, China, Mexico, the Philippines, Sweden, Bulgaria, Luxembourg, Malta, and Indonesia pledged about $852 million.

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