UA-55300619-1

IMF, WB call for a stop to debt servicing in face of Covid-19 induced recession in Africa

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The IMF and World Bank have called for a halt to debt servicing for the world’s poorest countries as the World Bank Group’s latest report has revealed.

According to the group’s recent report, sub-Saharan Africa was going into recession with the initially projected 2020 growth being adversely affected by the impact of the coronavirus (COVID-19) outbreak.

The IMF says the standstill of debt service to official bilateral creditors for the world’s poorest countries should help economies deal with the strong negative effects of COVID-19.

It notes that Africa, particularly the sub-Saharan region’s growth is forecast would fall sharply and push the region into recession for the first time in over 25 years.

The call came after the World Bank Group (WBG) and the International Monetary Fund (IMF) had made similar reservations regarding the coronavirus outbreak and its likely economic and social consequences for International Development Association (IDA) countries.

The IDA is made up of 173 countries which is home to a quarter of the wold’s population and two thirds of the world’s population living in extreme poverty. Meanwhile, Zambia is a member of this grouping.

In a joint press statement, both WBG and the IMF have outlined how the two global institutions are planning to help developing countries deal with the deadly coronavirus through debt deferement.

“With immediate effect and consistent with national laws of the creditor countries the Wolrd Bank Group (WBG) and the International Monetary Fund (IMF) call on all official bilateral creditors to suspend debt payments from IDA countries that requests forebearance,” reads the statement.

According to the two institutions, the move would help IDA countries with the much needed liquidity to tackle challenges posed by coronavirus outbreak and allow time for assessement of the crisis impact and financing needs for each country.

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Start: 2019-07-01 End: 2019-07-31