NIGERIA has been excluded from the list of 28 countries granted debt pardon by the International Monetary Fund (IMF) under the Catastrophe Containment and Relief Trust (CCRT) which offers an amnesty to very poor countries.
As a result of the economic fallout of coronavirus pandemic, many poor countries have been unable to honour their debt obligations, forcing creditors to right them off. Last week, the executive board of the IMF approved a third tranche of grants for debt service relief for 28 member countries under the CCRT, following two prior tranches approved on April 13, 2020 and October 2, 2020, respectively.
In a report released yesterday, the IMF said the latest approval will enable the disbursement of grants from the CCRT for payment of all eligible debt service due to its poorest and most vulnerable members from April 14, 2021 to October 15, 2021, estimated at $238m. Beneficiaries of previous CCRT payments include Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Ethiopia, and Gambia.
Others are Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen. According to the IMF, 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 through from October 16, 2021 to April 13, 2022 amounting to a total of about $964m. In March 2020, Kristalina Georgieva, the IMF managing director launched an urgent fundraising effort to raise $1.4bn in grants for the CCRT.
This move would enable the CCRT to provide financial assistance for relief on debt service for up to a maximum of two years, while leaving it adequately funded for future needs. Thus far, donors have pledged contributions totalling about $774m, including from the European Union, the UK, Japan, Germany, France, the Netherlands, Switzerland, Norway, Singapore, China, Mexico, Philippines, Sweden, Bulgaria, Luxembourg and Malta.
IMF executive directors noted that the Covid-19 pandemic continues to exact a severe human and economic toll on poor 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.