More than Half of Low-Income Countries in Debt Distress –IMF
The International Monetary Fund (IMF) says it is playing an active role in mediating the debt debacle facing some countries. The Managing Director of IMF, Kristalina Georgieva, said this during the 2023 Annual Meetings Plenary on Friday in Marrakech.
According to Georgieva, more than half of low-income countries remain in or are at high risk of debt distress. She said about a fifth of emerging economies faced “default-like spreads”.
“The common framework is starting to deliver on debt restructurings, albeit slowly.
“And the more recent Global Sovereign Debt Roundtable established by the Indian G20 presidency, the IMF and the World Bank, is bringing all relevant creditors and debtors together with promising signs, ” she said.
The IMF managing director said that the fund was also committed to finding a lifeline for many countries in their time of need, through a “global financial safety net”.
“Since the onset of the pandemic, we have provided about one trillion dollars in liquidity and financing.
“This came via 650 billion dollars in Special Drawing Rights (SDRs) and 320 billion dollars in lending to 96 countries, including 56 low-income nations,” she said.
She said that the IMF activated a programme of direct debt relief to its poorest members and also mobilised emergency financing during the COVID-19 pandemic. She added that the IMF also inaugurated its newest instrument, the Resilience and Sustainability Trust (RST).
“For the first time in history, the RST provides long-term affordable resources to vulnerable low, and middle-income countries.
“One year after it was operationalised, we have 11 countries benefitting from RST support to help them adapt and build resilience, especially to climate change,” Georgieva said. #More than Half of Low-Income Countries in Debt Distress –IMF Naira Devaluation Deepens Economic Crisis in Nigeria