Workers of the fish drying industry walk in the the deserted fish market in Rufisque on APril 9, 2020. - The World Bank warned Thursday sub-Saharan Africa could slip into its first recession in 25 years because of coronavirus and called for debt relief to ease the impact on the world's most impoverished region. (Photo: AFP)
G20 and Paris Club creditor nations have agreed to a partial moratorium on debt payments for the world's poorest countries in 2020 due to the coronavirus crisis, French Finance Minister Bruno Le Maire said Tuesday.
There have been growing calls for debt forgiveness, including from Pope Francis and French President Emmanuel Macron, given the need for countries to lift spending on health care to confront the pandemic and its economic fallout.
For 76 eligible nations, including 40 in sub-Saharan Africa countries, France "obtained a moratorium from bilateral creditors and private creditors, for a total of $20 billion," Le Maire said in conference call.
That breaks out to $12 billion in payments to bilateral creditors and $8 billion to private creditors.
The total debt servicing costs for those nations this year was $32 billion.
Le Maire said the deal was reached at the level of the Paris Club of creditor nations and the G20 group of most industrialised countries thanks to China's support.
"There remains $12 billion in multilateral payments of which the World Bank accounts of a large part. We'd like it to join the moratorium as well," said Le Maire, adding that due to technical issues the multilateral institution hadn't yet adopted a position.
The International Monetary Fund (IMF) on Monday announced debt relief for 25 poor countries for six months.
Pope Francis in his Easter Sunday homily called for debt relief for the world's poorest countries.
In a televised national address on Monday, France's Macron went further and called for cancelling the debts.
Le Maire acknowledged that a moratorium fell short of that goal, but said it represents a "major step" towards helping countries respond to the coronavirus crisis.
"If for certain countries among the poorest on the planet it appears that the debt is not sustainable... that could lead us cancel debts," Le Maire said.
He said cancellation of debts would be done on a case by case basis and on a multilateral level by creditors.