G20 Suspends Debt Servicing By Poor Nations

The G20 countries have reached an agreement to  suspend poor nations´ obligations to service their debts.

The International Monetary Fund had last week called on multilateral agencies to halt debt obligations for poor and vulnerable countries.

Also, about  20 European and African leaders, including France, Germany and South Africa made a joint appeal for a moratorium on debt payment  to boost Africa’s effort to combat the impact of coronavirus.

The G20 on Wednesday said they would immediately halt poor and vulnerable country’s debt servicing so that they could focus on the health care sector.

The G-20 richest economies did not specify the number of  countries that would benefit from the moratorium, French Finance Minister Bruno Le Maire disclosed that 76 countries were eligible.

He added that  about 40 sub-Saharan Africa countries were eligible for the debt freeze.

Le Maire also said that the debt payments worth $20 billion would be suspended. The. $20 billion includes $8 billion debt to private creditors and $12 billion owed to different countries.

Similarly,  $12 billion in debt payments to multilateral institutions, including the World Bank would be considered for debt freeze.

The statement also revealed that the moratorium would last till December 2020, with a possibility of extension.

The World Bank Group President, David Malpass and IMF Managing Director, Kristalina Georgieva, said  in a joint statement that, “This is a powerful, fast-acting initiative that will do much to safeguard the lives and livelihoods of millions of the most vulnerable people.”