April 24 (THEWILL) – The World Bank and the International Monetary Fund (IMF) have unveiled their intention to accelerate the implementation of the G20 debt relief program.
The announcement was made at the 2022 World Bank and IMF Spring Meetings in Washington DC.
The institutions recalled that in November 2020, the G20 reached agreement on a common framework to address insolvency and liquidity issues in DSSI-eligible countries, including Nigeria.
In a briefing attended by IMF Managing Director Kristalina Georgieva, World Bank President David Malpass said the institutions would help debtor countries achieve development and macroeconomic stability.
These include strengthening the institutions and capacities needed to improve debt transparency, developing mechanisms to resolve private sector over-indebtedness, and ensuring effective supervision of the financial sector.
Others improve access to long-term finance and enable financial deepening that lowers the cost of investing and spreads risk.
“The ongoing war in Ukraine and the weak economic outlook with rising inflation and likely tightening of financing conditions will add to the debt burden.
“Our goal is rapid debt relief that would return these countries to debt sustainability,” Malpass noted.
Admitting that execution of the G20 common framework has been slow, the leader listed four priorities identified by the terms of the World Bank and IMF.
These include strengthening the institutions and capacities needed to improve debt transparency, developing mechanisms
Admitting that execution of the G20 common framework has been slow, the chief listed four priorities identified by the World Bank and IMF teams.
They include faster and more efficient processes through time-limited steps in the implementation and introduction of a debt service moratorium to meet the liquidity needs of countries requesting treatment, interest-free penalty.
Others are greater clarity on how official bilateral creditors will apply and assess comparability of treatment; and the expansion of coordinated debt treatments to non-ISSD-eligible countries with debt vulnerabilities.
Malpass added that the priorities were tailored to current circumstances, while taking into account lessons from past debt crises and restructurings.