Four countries have signed the moratorium with the Paris Club, after the G20’s decision to suspend debt service this year. 20 others are currently in the process of finalizing the documents, in turn to sign an agreement with the Paris Club.
The coronavirus pandemic has created financial puzzles, which are all the more difficult to solve for poor and indebted countries. To allow them to free up funds to face the crisis, a moratorium on the payment of debt service has been decided by the Paris Club and the G20. A month later, only Mali, Nepal, Dominica and Grenada have just finalized an agreement. Only four agreements, therefore, on the 77 eligible countries, including 41 in sub-Saharan Africa. But others could follow quickly.
20 other countries are said to be finalizing the documents to conclude an agreement with the Paris Club. A source close to the file, cited by AFP, indicates that the DRC, Ethiopia and Cameroon are on the verge of obtaining a moratorium. A few dozen states could also send their requests in the coming days, according to Bercy.
A little ” delay effect ”, Which does not surprise a source within the French Ministry of the Economy. Indeed, some would first like to finalize the discussions with rating agencies, to make sure there is no impact on their rating.
The sums not paid this year will be repayable in three years from 2022, because it is only a moratorium valid until the end of the year. Nevertheless, the creditors are working on the result. No consensus at this stage. The autumn meetings of the IMF and the World Bank as well as the G20 to be held in November will be an opportunity to take stock. At Bercy, an extension of the moratorium is not excluded if necessary, then a case-by-case study of debt sustainability to decide what action to take.
Waiting, World Bank President David Malpass Hopes Private Creditors Will Also Be Understanding.