The Executive Board of the International Monetary Fund has excluded Nigeria from the list of 28 countries granted debt pardon.
The Board has approved the third tranche of grants for debt
service relief for 28 member countries under the Catastrophe Containment and
Relief Trust.
This approval follows two prior tranches approved on April
13, 2020, and October 2, 2020, respectively.
In a report released yesterday, the Fund said the approval
will enable the disbursement of grants from the CCRT for payment of all
eligible debt service falling due to the IMF from its poorest and most
vulnerable members from April 14, 2021, to October 15, 2021, estimated at SDR
168 ($238) million.
The beneficiaries of the previous CCRT tranche are
Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad,
Comoros, the Democratic Republic of the Congo, Djibouti, Ethiopia, and The
Gambia.
Others are Guinea, Guinea-Bissau, Haiti, Liberia,
Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and
PrÃncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.
This tranche of grants for debt service relief will continue
to help free up scarce financial resources for vital emergency health, social,
and economic support to mitigate the impact of the COVID-19 pandemic. Subject
to the availability of sufficient resources in the CCRT, debt service relief
could be provided for the remaining period from October 16, 2021, to April 13,
2022, amounting to a total of about SDR 680 ($964) million.
In March 2020, Managing Director Kristalina Georgieva
launched an urgent fundraising effort to raise $1.4 billion in grants for the
CCRT. This would enable the CCRT to provide financial assistance for relief on
debt service for up to a maximum of two years while leaving the CCRT adequately
funded for future needs. Thus far, donors have pledged contributions totalling
about $774 million, including from the European Union, the UK, Japan, Germany,
France, the Netherlands, Switzerland, Norway, Singapore, China, Mexico,
Philippines, Sweden, Bulgaria, Luxembourg, and Malta.
Executive Directors welcomed the opportunity to consider the
approval of grants under the Catastrophe Containment and Relief Trust to
support the third tranche of debt service relief for the Fund’s poorest and
most vulnerable members. They noted that the COVID-19 pandemic continues to
exact a severe human and economic toll on these countries and that the
resources freed up by the first and second tranches of CCRT debt service relief
had helped mitigate the impact of the pandemic.
Directors agreed that the available resources and pledges
are sufficient to finance the third tranche of debt service relief for the
period from April 14 to October 15, 2021. Accordingly, they approved grant
assistance under the CCRT for relief for 28 eligible members that have debt
service falling due during this period.
Directors concurred that countries that received the CCRT
grants for debt relief are generally pursuing appropriate macroeconomic
policies in response to the economic fallout from the global pandemic. They
welcomed that a number of member countries were transitioning to Upper Credit
Tranche-quality arrangements which would provide a stronger policy framework
for the recovery period. Directors also observed that most countries would
benefit from a resumption of Fund surveillance and updated debt sustainability
assessments.
The Fund directors noted the progress made in implementing governance safeguards commitments regarding COVID-19 related spending in CCRT-eligible countries. However, they regretted implementation delays in some countries, particularly in disclosing beneficial ownership information on entities awarded government contracts. Directors thus underscored the importance of continued follow-through on the commitments on governance and transparency, supported if necessary, by technical assistance.
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