‘This is not a waiver of the country’s debt,’ Deputy Finance Minister Flomo notes
The International Monetary Fund has named Liberia among 25 of the Fund’s member countries to benefit from immediate debt relief in the form of grants over the next six months. This, a release from the IMF said, will help these countries, which are known to be among the poorest member states of the IMF, to channel their scarce financial resources toward vital emergency medical and other relief efforts amid the global threat of the novel Coronavirus pandemic.
Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) issued the following statement:
“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.
“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 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.”
The Government of Liberia has expressed profound gratitude to the International Monetary Fund for the debt service relief gesture.
Speaking about the IMF’s debt relief, the Deputy Minister for Economic Management at the Ministry of Finance and Development Planning, Augustus J. Flomo explained that the Fund had offered a window considering the adverse economic impacts of COVID-19 pandemic which the government took advantage of.
He added that the “time benefit” of the Relief is delayed repayments or rescheduling of debts and will make available physical cash to respond to the COVID-19 pandemic.
He however, however, clarified that this was not a “waiver” of the country’s debt.
Minister Flomo added that the revenue slump had Limited the government’s capacity to meet up with its financial obligations to multilateral institutions, while at the same time hampering its financial ability to address the national health emergency.
He also disclosed that as a result of the IMF’s Relief announced on Monday, the Government now has an opportunity to access emergency financing windows at the IMF to help address the country’s fiscal imbalances.
The Deputy Minister emphasized the need for sustained collaboration between the government and the private sector, as well as, with the civil society and development partners to address the COVID-19 pandemic so as to ensure that the economy gets back on its feet.
The Fund along with the World Bank has called for rich nations to stop collecting debt payments from poor countries from May 1 through June 2021.
The countries that will receive debt service relief, according to the IMF, are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, D.R. Congo, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.