Malawi amongst 25 countries set for immediate IMF debt relief

 

Maravi Express

Malawi is amongst 25 countries that have been earmarked by the International Monetary Fund (IMF) for immediate debt relief.

A statement from the IMF posted on www.imf.org on Monday, April 13 from Washington, DC quotes IMF Managing Director, Kristalina Georgieva as saying the Executive Board approved the immediate debt service relief to the 25 of the its member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.

IMF Managing Director, Kristalina Georgieva

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” Georgieva says in the statement.

“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the UK and US$100 million provided by Japan as immediately available resources. 

Advertisement

“Others, including China and the Netherlands, are also stepping forward with important contributions. 

“I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”

Advertising

The countries that will receive debt service relief today are: Mozambique, Madagascar, CongoD.R., Liberia, Mali, Benin, Burkina Faso, Central African Republic, Chad, Comoros, The Gambia, Guinea, Guinea-Bissau, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Togo, Afghanistan, Haiti, Nepal, Solomon Islands, Tajikistan and Yemen.

Advertisement

Quoting Georgieva in a report last week, Aljazeera said the Coronavirus pandemic sweeping the world will turn global economic growth “sharply negative” in 2020, triggering the worst fallout since the 1930s Great Depression, with only a partial recovery seen in 2021.

In the report, Georgieva painted a far bleaker picture of the social and economic impact of the COVID-19 than even a few weeks ago, noting governments had already undertaken fiscal stimulus measures of $8 trillion, but more would likely be needed.

Coronavirus alert

She had told Aljazeera the crisis would hit emerging markets and developing countries hardest of all, and those countries would then need hundreds of billions of dollars in foreign aid.

“Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020,” she had said last Thursday.

Coronavirus alert

“Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.”

If the pandemic faded in the second half of the year, the IMF expected a partial recovery in 2021, Georgieva said, but she warned the situation could also get worse.

Coronavirus alert

“I stress there is tremendous uncertainty about the outlook: it could get worse depending on many variable factors, including the duration of the pandemic,” she said.

The novel Coronavirus that emerged in China in December has raced around the globe, infecting 1.41 million people and killing 83,400, according to a Reuters tally.

Coronavirus alert

Georgieva said the pandemic was hitting both rich and poor countries, but many in Africa, Asia and Latin America were at higher risk because they had weaker health systems. 

They were also unable to implement social distancing in their densely populated cities and poverty-stricken slums.

She said investors had already removed some $100bn in capital from those economies, more than three times the outflow seen during the same period of the global financial crisis.

Coronavirus alert

With commodity prices down sharply, emerging-market and developing countries would need trillions of dollars to fight the pandemic and rescue their economies, she said.