Today, G20 Finance Ministers and Central Bank Governors agreed to suspend debt repayments for the world’s poorest countries for the remainder of 2020 as part of its COVID-19 action plan. This includes supporting a time-bound suspension on government debt and calling on private creditors and multilateral development banks to follow suit.
Gayle Smith, President and CEO of The ONE Campaign, said:
“The G20’s decision to suspend debt repayments for the world’s most vulnerable countries is a vital first step in this ongoing crisis, and will enable those countries to prioritise fighting COVID-19 and to withstand the first wave economic impact of this global pandemic.
“We won’t beat this virus until we beat it everywhere. And we won’t limit the economic impact of this pandemic unless we secure a truly global recovery that leaves no one behind.
“It is now critical that the world builds on this important first step, and we now look to private creditors, the IMF and World Bank to do their part.”
Edwin Ikhouria, Africa Executive Director of The ONE Campaign, said:
“As Africa faces the danger of slipping into a new debt crisis, we strongly urge the G20 to not only extend the debt suspension agreement to the poorest countries, but also every country in Africa through 2021. Many that are not included – South Africa, Egypt and others – face tremendous economic pressure as they fight the virus.
“Ultimately, the debt repayment suspension is a short-term solution, as many of these countries will struggle to meet spiralling debt costs. We will also need a longer-term plan to restructure the debt.”
Notes to editors
- The latest report by ONE highlights the poorest countries in the world owe at least $41 billion in debt service in 2020 — $18 billion is owed to governments, $10.4 billion to private lenders, and $12.5 billion to multilaterals.
- Globally, 64 countries — 30 of which in Sub-Saharan Africa — spend more on repaying public debt than investment on public health. For example, The Gambia spends 9 times more on debt repayment than its annual health budget. Similarly, Angola and the Republic of Congo spend 6 times more on external debt repayment than their health budgets.