The G-20, in a bid to combat the economic fallouts of the pandemic, has endorsed a plan which will enable the freezing of debt obligations to developing nations till mid-2021.
This was reported by Reuters after the group met over the weekend to discuss vaccine relief and other pressing issues. They also agreed on a common approach to dealing with debt relief.
The G-20 leaders announced in a communique urging private creditors to extend debt relief to nations that are eligible for the initiative.
What they are saying
The Head of the International Monetary Fund, Kristalina Georgieva, urged that the world still runs the risk of falling into another crisis and called for closer cooperation through faster integration of the G-20 Framework. She added that the G-20’s efforts in combating the pandemic have helped soften the economic fallout caused by covid-19.
“The world is not out of the woods yet in terms of this crisis. Cooperation is going to be even more important going forward,” she said.
“We must also help those countries not covered by the Framework to address debt vulnerabilities, so that their economies can become more resilient,” she added.
What you should know
Nairametrics reported that the G-20 met earlier this weekend and agreed to announce a pledge to pay for vaccine distribution to developing nations that can’t afford it. The leaders also discussed a debt extension programme to developing nations during the weekend’s G-20 summit.
In April 2020, Ministers of Finance from African countries requested debt relief from bilateral, multilateral, and commercial partners to cushion the negative impact of the coronavirus.
Last Month, Nairametrics reported that the total external debt of the least developed countries under the Debt Service Suspension Initiative (DSSI) has increased by 9.55% to $744 billion in 2019. This was disclosed in the World Bank’s International Debt Statistics 2021.
The global Debt Service Suspension Initiative by rich nations made it eligible for 73 countries to have their debt frozen. However, only 46 countries took part in the initiative, freezing up to 5.7 billion in 2020 debt service payments.