The IMF approved $500mn on Monday to cancel six months of debt payments. This is for 25 of the world's most impoverished countries. So they can help tackle the COVID-19 pandemic.
IMF Executive Director Kristalina Georgieva issued a statement saying; the IMF executive board approved the immediate debt service relief for 19 African countries. Besides, Afghanistan, Haiti, Nepal, Solomon Islands, Tajikistan and Yemen.
"This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations. This is for an initial phase over the next six months. This will also help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts," Georgieva said.
She said the money will come from the IMF's revamped Catastrophe Containment and Relief Trust. It will use recent pledges of $185mn from the United Kingdom and $100mn from Japan. She urged other donors to help replenish the trust's resources.
The 19 African countries to receive debt relief are; Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, The Gambia, Guinea. Besides, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone and Togo.
UN Secretary-General Antonio Guterres and a group of 165 former global leaders and prominent international figures urged the suspension of debt repayments for the world's poorest and most vulnerable countries. So, they can use their scant resources for the coronavirus crisis.
Eric LeCompte, executive director of Jubilee USA Network, an alliance of more than 75 US organizations and 700 faith communities working for debt relief, called the IMF announcement "an incredibly positive step."
"Many of these countries have less than 50 critical care unit beds per country," LeCompte said in a statement. "These countries need to bolster their health systems right away and cancellation of debt for six months will help these countries."
But LeCompte said more needs to be done.
"As the poorest countries in the world, they really need full cancellation" of their debts, he said.