Two weeks after the Paris Club agreed to freeze debt payments of the 77 poorest countries this year, to free up cash flow for the nations to combat the coronavirus, it has suspended debt payments for four more nations, bringing the entire number of nations to 12 from a previously selected eight at a sum of $1.1 billion worth of debt freezing.
The new beneficiary nations include; Chad, Ethiopia, Pakistan, and the Republic of Congo.
Of the 77 nations eligible for debt relief, 30 have applied so far. The G-20’s plan is to suspend up to $1.1 billion in debt payments for poor countries.
Not all poor nations eligible for debt relief have signed up, as some fear their credit rating could get hit after warnings from rating agencies that failure to pay private creditors will count as a default. Kenya admitted this, to be the reason it did not sign up.
However, the Paris Club has clarified that countries that apply for debt relief can specify if they want debt relief to state creditors.
Download the Nairametrics News App