IMF approves $500m in debt relief for 25 countries amid COVID-19 challenges

The International Monetary Fund has (IMF) has approved an amount of US$500 million in grant-based debt service relief to 25 countries to help them fight COVID-19 and also deal with the negative impact of COVID-19 on their economies.

IMF’s Managing Director, Kristalina Georgieva

IMF’s Managing Director, Kristalina Georgieva in a statement that the grant is under the IMF’s Catastrophe Containment and Relief Trust.

The countries that will benefit from the grant include “Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, DR Congo, and The Gambia.”

The 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.

Ms Georgieva said, “today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.”

Her statement also explained that the grant was made available only to the “poorest” and “most vulnerable” IMF members.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.”

The donors to the CCRT fund include the UK, China, Japan, and the Netherlands.

“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the U.K. and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries,” Ms Georgieva said.

Meanwhile, the IMF has also approved a disbursement of US$1 billion to Ghana to help address the urgent fiscal and balance of payments needs that the country is facing due to the pandemic.

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