Home Business Ghana likely to have temporary debt relief over Coronavirus pandemic

Ghana likely to have temporary debt relief over Coronavirus pandemic

Ghana is among the International Development Association (IDA) countries that could benefit from temporary debt relief during the novel coronavirus pandemic.

The World Bank Group and International Monetary Fund have called “on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

“This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country,” a statement from the World Bank said.

It noted that the “coronavirus outbreak is likely to have severe economic and social consequences for IDA countries.”

In line with this, G20 leaders have been urged to task the World Bank Group and International Monetary Fund to make crisis impact assessments, “including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries.”

There are currently 76 countries that are eligible to receive IDA resources.

The coronavirus pandemic sparked fears of a global recession because of the widespread halt of economic activity in major economies.

Major cities and countries have closed their borders whilst halting significant economic activities in a bid to enforce social distancing directives to curb the spread of the virus.

Ghana currently has 68 cases of the novel coronavirus with three deaths.

The government has closed all borders and banned public gatherings.

There are currently fears there could be lockdown in two of the most densely populated regions; the Ashanti Region and the Greater Accra Region.

Find below the full World Bank statement

The World Bank Group and International Monetary Fund have issued the following joint statement to the G20 concerning debt relief for the poorest countries:

The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

With immediate effect—and consistent with national laws of the creditor countries—the World Bank Group (WBG) and the International Monetary Fund (IMF) call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country.

We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries. We will seek endorsement for the proposal at the Development Committee during the Spring Meetings (April 16/17).

The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action.

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